Correlation Between Salesforce and Devon Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and Devon Energy 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 Devon Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Devon Energy, you can compare the effects of market volatilities on Salesforce and Devon Energy 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 Devon Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Devon Energy.
Diversification Opportunities for Salesforce and Devon Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Devon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Devon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Devon Energy 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 Devon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Devon Energy has no effect on the direction of Salesforce i.e., Salesforce and Devon Energy go up and down completely randomly.
Pair Corralation between Salesforce and Devon Energy
Considering the 90-day investment horizon Salesforce is expected to under-perform the Devon Energy. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.12 times less risky than Devon Energy. The stock trades about -0.16 of its potential returns per unit of risk. The Devon Energy is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 19,440 in Devon Energy on October 25, 2024 and sell it today you would earn a total of 2,487 from holding Devon Energy or generate 12.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Salesforce vs. Devon Energy
Performance |
| Timeline |
| Salesforce |
| Devon Energy |
Salesforce and Devon Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Devon Energy
The main advantage of trading using opposite Salesforce and Devon Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Devon Energy 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 Devon Energy will offset losses from the drop in Devon Energy's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Devon Energy vs. Mangels Industrial SA | Devon Energy vs. Liberty Broadband | Devon Energy vs. Check Point Software | Devon Energy vs. Seagate Technology Holdings |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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