Correlation Between Salesforce and Central Retail
Can any of the company-specific risk be diversified away by investing in both Salesforce and Central Retail 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 Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Central Retail, you can compare the effects of market volatilities on Salesforce and Central Retail 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 Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Central Retail.
Diversification Opportunities for Salesforce and Central Retail
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Central is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Central Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Central Retail 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 Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Central Retail has no effect on the direction of Salesforce i.e., Salesforce and Central Retail go up and down completely randomly.
Pair Corralation between Salesforce and Central Retail
Considering the 90-day investment horizon Salesforce is expected to generate 0.99 times more return on investment than Central Retail. However, Salesforce is 1.01 times less risky than Central Retail. It trades about 0.38 of its potential returns per unit of risk. Central Retail is currently generating about 0.16 per unit of risk. If you would invest 29,046 in Salesforce on August 26, 2024 and sell it today you would earn a total of 5,156 from holding Salesforce or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Central Retail
Performance |
| Timeline |
| Salesforce |
| Central Retail |
Salesforce and Central Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Central Retail
The main advantage of trading using opposite Salesforce and Central Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Central Retail 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 Retail will offset losses from the drop in Central Retail's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Central Retail vs. The Erawan Group | Central Retail vs. Airports of Thailand | Central Retail vs. Eastern Technical Engineering | Central Retail vs. Pylon Public |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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