Correlation Between Salesforce and Central Hydropower
Can any of the company-specific risk be diversified away by investing in both Salesforce and Central Hydropower 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 Central Hydropower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Central Hydropower JSC, you can compare the effects of market volatilities on Salesforce and Central Hydropower 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 Central Hydropower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Central Hydropower.
Diversification Opportunities for Salesforce and Central Hydropower
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Central is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Central Hydropower JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Hydropower JSC 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 Central Hydropower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Hydropower JSC has no effect on the direction of Salesforce i.e., Salesforce and Central Hydropower go up and down completely randomly.
Pair Corralation between Salesforce and Central Hydropower
Considering the 90-day investment horizon Salesforce is expected to generate 1.19 times less return on investment than Central Hydropower. In addition to that, Salesforce is 2.84 times more volatile than Central Hydropower JSC. It trades about 0.04 of its total potential returns per unit of risk. Central Hydropower JSC is currently generating about 0.12 per unit of volatility. If you would invest 2,749,609 in Central Hydropower JSC on August 27, 2024 and sell it today you would earn a total of 555,391 from holding Central Hydropower JSC or generate 20.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Central Hydropower JSC
Performance |
| Timeline |
| Salesforce |
| Central Hydropower JSC |
Salesforce and Central Hydropower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Central Hydropower
The main advantage of trading using opposite Salesforce and Central Hydropower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Central Hydropower 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 Central Hydropower will offset losses from the drop in Central Hydropower's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Central Hydropower vs. Danang Education Investment | Central Hydropower vs. Construction And Investment | Central Hydropower vs. Thanh Dat Investment | Central Hydropower vs. Ipa Investments 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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