Correlation Between Salesforce and Equitable
Can any of the company-specific risk be diversified away by investing in both Salesforce and Equitable 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 Equitable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Equitable Group, you can compare the effects of market volatilities on Salesforce and Equitable 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 Equitable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Equitable.
Diversification Opportunities for Salesforce and Equitable
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Equitable is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Equitable Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equitable Group 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 Equitable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equitable Group has no effect on the direction of Salesforce i.e., Salesforce and Equitable go up and down completely randomly.
Pair Corralation between Salesforce and Equitable
Considering the 90-day investment horizon Salesforce is expected to generate 1.27 times more return on investment than Equitable. However, Salesforce is 1.27 times more volatile than Equitable Group. It trades about 0.05 of its potential returns per unit of risk. Equitable Group is currently generating about 0.05 per unit of risk. If you would invest 28,572 in Salesforce on November 8, 2024 and sell it today you would earn a total of 6,221 from holding Salesforce or generate 21.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Salesforce vs. Equitable Group
Performance |
| Timeline |
| Salesforce |
| Equitable Group |
Salesforce and Equitable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Equitable
The main advantage of trading using opposite Salesforce and Equitable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Equitable 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 Equitable will offset losses from the drop in Equitable's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Equitable vs. goeasy | Equitable vs. Canadian Western Bank | Equitable vs. TFI International | Equitable vs. Intact Financial |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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