Correlation Between Salesforce and Centaur Media
Can any of the company-specific risk be diversified away by investing in both Salesforce and Centaur Media 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 Centaur Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Centaur Media, you can compare the effects of market volatilities on Salesforce and Centaur Media 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 Centaur Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Centaur Media.
Diversification Opportunities for Salesforce and Centaur Media
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Centaur is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Centaur Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaur Media 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 Centaur Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaur Media has no effect on the direction of Salesforce i.e., Salesforce and Centaur Media go up and down completely randomly.
Pair Corralation between Salesforce and Centaur Media
Considering the 90-day investment horizon Salesforce is expected to generate 0.66 times more return on investment than Centaur Media. However, Salesforce is 1.52 times less risky than Centaur Media. It trades about 0.16 of its potential returns per unit of risk. Centaur Media is currently generating about -0.14 per unit of risk. If you would invest 23,588 in Salesforce on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Salesforce or generate 39.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Salesforce vs. Centaur Media
Performance |
| Timeline |
| Salesforce |
| Centaur Media |
Salesforce and Centaur Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Centaur Media
The main advantage of trading using opposite Salesforce and Centaur Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Centaur Media 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 Centaur Media will offset losses from the drop in Centaur Media's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Centaur Media vs. X FAB Silicon Foundries | Centaur Media vs. Coor Service Management | Centaur Media vs. Hochschild Mining plc | Centaur Media vs. Universal Music Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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