Correlation Between Salesforce and Brent Crude
Can any of the company-specific risk be diversified away by investing in both Salesforce and Brent Crude 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 Brent Crude into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Brent Crude Oil, you can compare the effects of market volatilities on Salesforce and Brent Crude 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 Brent Crude. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Brent Crude.
Diversification Opportunities for Salesforce and Brent Crude
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and Brent is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Brent Crude Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brent Crude Oil 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 Brent Crude. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brent Crude Oil has no effect on the direction of Salesforce i.e., Salesforce and Brent Crude go up and down completely randomly.
Pair Corralation between Salesforce and Brent Crude
Considering the 90-day investment horizon Salesforce is expected to under-perform the Brent Crude. In addition to that, Salesforce is 1.0 times more volatile than Brent Crude Oil. It trades about -0.15 of its total potential returns per unit of risk. Brent Crude Oil is currently generating about 0.4 per unit of volatility. If you would invest 7,245 in Brent Crude Oil on October 20, 2024 and sell it today you would earn a total of 708.00 from holding Brent Crude Oil or generate 9.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Salesforce vs. Brent Crude Oil
Performance |
| Timeline |
| Salesforce |
| Brent Crude Oil |
Salesforce and Brent Crude Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Brent Crude
The main advantage of trading using opposite Salesforce and Brent Crude positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Brent Crude 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 Brent Crude will offset losses from the drop in Brent Crude's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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