Correlation Between Salesforce and Coface SA
Can any of the company-specific risk be diversified away by investing in both Salesforce and Coface SA 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 Coface SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Coface SA, you can compare the effects of market volatilities on Salesforce and Coface SA 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 Coface SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Coface SA.
Diversification Opportunities for Salesforce and Coface SA
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Coface is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Coface SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coface SA 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 Coface SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coface SA has no effect on the direction of Salesforce i.e., Salesforce and Coface SA go up and down completely randomly.
Pair Corralation between Salesforce and Coface SA
Considering the 90-day investment horizon Salesforce is expected to generate 1.32 times more return on investment than Coface SA. However, Salesforce is 1.32 times more volatile than Coface SA. It trades about 0.2 of its potential returns per unit of risk. Coface SA is currently generating about 0.04 per unit of risk. If you would invest 21,733 in Salesforce on August 28, 2024 and sell it today you would earn a total of 12,178 from holding Salesforce or generate 56.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Salesforce vs. Coface SA
Performance |
| Timeline |
| Salesforce |
| Coface SA |
Salesforce and Coface SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Coface SA
The main advantage of trading using opposite Salesforce and Coface SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Coface SA 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 Coface SA will offset losses from the drop in Coface SA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Coface SA vs. Nexity | Coface SA vs. SCOR SE | Coface SA vs. Eutelsat Communications SA | Coface SA vs. Rubis SCA |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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