Correlation Between Salesforce and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Salesforce and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Geely Automobile Holdings, you can compare the effects of market volatilities on Salesforce and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Geely Automobile.
Diversification Opportunities for Salesforce and Geely Automobile
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Geely is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Salesforce i.e., Salesforce and Geely Automobile go up and down completely randomly.
Pair Corralation between Salesforce and Geely Automobile
Considering the 90-day investment horizon Salesforce is expected to generate 6.11 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Salesforce is 1.13 times less risky than Geely Automobile. It trades about 0.04 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 3,598 in Geely Automobile Holdings on November 9, 2024 and sell it today you would earn a total of 352.00 from holding Geely Automobile Holdings or generate 9.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Geely Automobile Holdings
Performance |
| Timeline |
| Salesforce |
| Geely Automobile Holdings |
Salesforce and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Geely Automobile
The main advantage of trading using opposite Salesforce and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Geely Automobile vs. Great Wall Motor | Geely Automobile vs. Polestar Automotive Holding | Geely Automobile vs. Dowlais Group plc | Geely Automobile vs. BYD Company Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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