Correlation Between Salesforce and Equifax
Can any of the company-specific risk be diversified away by investing in both Salesforce and Equifax 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 Equifax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Equifax, you can compare the effects of market volatilities on Salesforce and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Equifax.
Diversification Opportunities for Salesforce and Equifax
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Equifax is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of Salesforce i.e., Salesforce and Equifax go up and down completely randomly.
Pair Corralation between Salesforce and Equifax
Considering the 90-day investment horizon Salesforce is expected to generate 1.07 times more return on investment than Equifax. However, Salesforce is 1.07 times more volatile than Equifax. It trades about 0.33 of its potential returns per unit of risk. Equifax is currently generating about -0.09 per unit of risk. If you would invest 29,377 in Salesforce on August 28, 2024 and sell it today you would earn a total of 4,534 from holding Salesforce or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Equifax
Performance |
| Timeline |
| Salesforce |
| Equifax |
Salesforce and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Equifax
The main advantage of trading using opposite Salesforce and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Equifax vs. Chesapeake Utilities | Equifax vs. Gaztransport Technigaz SA | Equifax vs. URBAN OUTFITTERS | Equifax vs. TEXAS ROADHOUSE |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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