Correlation Between Salesforce and Gores Holdings
Can any of the company-specific risk be diversified away by investing in both Salesforce and Gores Holdings 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 Gores Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Gores Holdings IX, you can compare the effects of market volatilities on Salesforce and Gores Holdings 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 Gores Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Gores Holdings.
Diversification Opportunities for Salesforce and Gores Holdings
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Gores is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Gores Holdings IX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gores Holdings IX 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 Gores Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gores Holdings IX has no effect on the direction of Salesforce i.e., Salesforce and Gores Holdings go up and down completely randomly.
Pair Corralation between Salesforce and Gores Holdings
Considering the 90-day investment horizon Salesforce is expected to generate 241.46 times less return on investment than Gores Holdings. But when comparing it to its historical volatility, Salesforce is 158.38 times less risky than Gores Holdings. It trades about 0.16 of its potential returns per unit of risk. Gores Holdings IX is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Gores Holdings IX on September 1, 2024 and sell it today you would lose (9.84) from holding Gores Holdings IX or give up 98.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.79% |
| Values | Daily Returns |
Salesforce vs. Gores Holdings IX
Performance |
| Timeline |
| Salesforce |
| Gores Holdings IX |
Salesforce and Gores Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Gores Holdings
The main advantage of trading using opposite Salesforce and Gores Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Gores Holdings 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 Gores Holdings will offset losses from the drop in Gores Holdings' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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