Correlation Between Salesforce and Canfor
Can any of the company-specific risk be diversified away by investing in both Salesforce and Canfor 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 Canfor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Canfor, you can compare the effects of market volatilities on Salesforce and Canfor 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 Canfor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Canfor.
Diversification Opportunities for Salesforce and Canfor
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Canfor is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Canfor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canfor 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 Canfor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canfor has no effect on the direction of Salesforce i.e., Salesforce and Canfor go up and down completely randomly.
Pair Corralation between Salesforce and Canfor
Considering the 90-day investment horizon Salesforce is expected to generate 0.93 times more return on investment than Canfor. However, Salesforce is 1.07 times less risky than Canfor. It trades about 0.09 of its potential returns per unit of risk. Canfor is currently generating about 0.02 per unit of risk. If you would invest 20,650 in Salesforce on September 1, 2024 and sell it today you would earn a total of 12,349 from holding Salesforce or generate 59.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Salesforce vs. Canfor
Performance |
| Timeline |
| Salesforce |
| Canfor |
Salesforce and Canfor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Canfor
The main advantage of trading using opposite Salesforce and Canfor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Canfor 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 Canfor will offset losses from the drop in Canfor's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Canfor vs. Canso Credit Trust | Canfor vs. Converge Technology Solutions | Canfor vs. Bank of Nova | Canfor vs. Stampede Drilling |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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