Correlation Between Salesforce and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Salesforce and Sterling Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Salesforce and Sterling Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Sterling Capital South, you can compare the effects of market volatilities on Salesforce and Sterling Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Salesforce with a short position of Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Sterling Capital.
Diversification Opportunities for Salesforce and Sterling Capital
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Sterling is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Sterling Capital South in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital South and Salesforce is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Salesforce are associated (or correlated) with Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital South has no effect on the direction of Salesforce i.e., Salesforce and Sterling Capital go up and down completely randomly.
Pair Corralation between Salesforce and Sterling Capital
Considering the 90-day investment horizon Salesforce is expected to generate 10.92 times more return on investment than Sterling Capital. However, Salesforce is 10.92 times more volatile than Sterling Capital South. It trades about 0.21 of its potential returns per unit of risk. Sterling Capital South is currently generating about 0.23 per unit of risk. If you would invest 29,889 in Salesforce on August 30, 2024 and sell it today you would earn a total of 3,112 from holding Salesforce or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Sterling Capital South
Performance |
| Timeline |
| Salesforce |
| Sterling Capital South |
Salesforce and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Sterling Capital
The main advantage of trading using opposite Salesforce and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Sterling Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Sterling Capital will offset losses from the drop in Sterling Capital's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Sterling Capital vs. Virginia Bond Fund | Sterling Capital vs. HUMANA INC | Sterling Capital vs. Aquagold International | Sterling Capital vs. Barloworld Ltd ADR |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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