Correlation Between Salesforce and Ceres Power
Can any of the company-specific risk be diversified away by investing in both Salesforce and Ceres Power 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 Ceres Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Ceres Power Holdings, you can compare the effects of market volatilities on Salesforce and Ceres Power 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 Ceres Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Ceres Power.
Diversification Opportunities for Salesforce and Ceres Power
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Ceres is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Ceres Power Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceres Power Holdings 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 Ceres Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceres Power Holdings has no effect on the direction of Salesforce i.e., Salesforce and Ceres Power go up and down completely randomly.
Pair Corralation between Salesforce and Ceres Power
Considering the 90-day investment horizon Salesforce is expected to generate 0.53 times more return on investment than Ceres Power. However, Salesforce is 1.89 times less risky than Ceres Power. It trades about 0.39 of its potential returns per unit of risk. Ceres Power Holdings is currently generating about -0.39 per unit of risk. If you would invest 28,443 in Salesforce on August 24, 2024 and sell it today you would earn a total of 5,135 from holding Salesforce or generate 18.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Ceres Power Holdings
Performance |
| Timeline |
| Salesforce |
| Ceres Power Holdings |
Salesforce and Ceres Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Ceres Power
The main advantage of trading using opposite Salesforce and Ceres Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Ceres Power 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 Ceres Power will offset losses from the drop in Ceres Power's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Ceres Power vs. NeoVolta Common Stock | Ceres Power vs. Hayward Holdings | Ceres Power vs. Espey Mfg Electronics | Ceres Power vs. Advanced Energy Industries |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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