Correlation Between Salesforce and Cresud SA
Can any of the company-specific risk be diversified away by investing in both Salesforce and Cresud 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 Cresud SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Cresud SA, you can compare the effects of market volatilities on Salesforce and Cresud 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 Cresud SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Cresud SA.
Diversification Opportunities for Salesforce and Cresud SA
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Cresud is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Cresud SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cresud 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 Cresud SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cresud SA has no effect on the direction of Salesforce i.e., Salesforce and Cresud SA go up and down completely randomly.
Pair Corralation between Salesforce and Cresud SA
Considering the 90-day investment horizon Salesforce is expected to under-perform the Cresud SA. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.32 times less risky than Cresud SA. The stock trades about -0.15 of its potential returns per unit of risk. The Cresud SA is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 144,000 in Cresud SA on October 20, 2024 and sell it today you would lose (1,500) from holding Cresud SA or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Cresud SA
Performance |
| Timeline |
| Salesforce |
| Cresud SA |
Salesforce and Cresud SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Cresud SA
The main advantage of trading using opposite Salesforce and Cresud SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Cresud 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 Cresud SA will offset losses from the drop in Cresud SA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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