Correlation Between Salesforce and Enel SpA
Can any of the company-specific risk be diversified away by investing in both Salesforce and Enel SpA 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 Enel SpA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Enel SpA, you can compare the effects of market volatilities on Salesforce and Enel SpA 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 Enel SpA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Enel SpA.
Diversification Opportunities for Salesforce and Enel SpA
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Enel is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Enel SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enel SpA 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 Enel SpA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enel SpA has no effect on the direction of Salesforce i.e., Salesforce and Enel SpA go up and down completely randomly.
Pair Corralation between Salesforce and Enel SpA
Considering the 90-day investment horizon Salesforce is expected to generate 1.06 times more return on investment than Enel SpA. However, Salesforce is 1.06 times more volatile than Enel SpA. It trades about 0.4 of its potential returns per unit of risk. Enel SpA is currently generating about -0.26 per unit of risk. If you would invest 28,676 in Salesforce on August 25, 2024 and sell it today you would earn a total of 5,526 from holding Salesforce or generate 19.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Enel SpA
Performance |
| Timeline |
| Salesforce |
| Enel SpA |
Salesforce and Enel SpA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Enel SpA
The main advantage of trading using opposite Salesforce and Enel SpA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Enel SpA 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 Enel SpA will offset losses from the drop in Enel SpA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Enel SpA vs. Autodesk | Enel SpA vs. Destiny Tech100 | Enel SpA vs. Eat Beyond Global | Enel SpA vs. Granite Construction Incorporated |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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