Correlation Between Salesforce and General Mills
Can any of the company-specific risk be diversified away by investing in both Salesforce and General Mills 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 General Mills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and General Mills, you can compare the effects of market volatilities on Salesforce and General Mills 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 General Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and General Mills.
Diversification Opportunities for Salesforce and General Mills
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and General is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and General Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Mills 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 General Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Mills has no effect on the direction of Salesforce i.e., Salesforce and General Mills go up and down completely randomly.
Pair Corralation between Salesforce and General Mills
Considering the 90-day investment horizon Salesforce is expected to under-perform the General Mills. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.2 times less risky than General Mills. The stock trades about -0.32 of its potential returns per unit of risk. The General Mills is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 9,082 in General Mills on November 28, 2024 and sell it today you would earn a total of 1,512 from holding General Mills or generate 16.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. General Mills
Performance |
| Timeline |
| Salesforce |
| General Mills |
Salesforce and General Mills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and General Mills
The main advantage of trading using opposite Salesforce and General Mills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, General Mills 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 General Mills will offset losses from the drop in General Mills' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| General Mills vs. INTERSHOP Communications Aktiengesellschaft | General Mills vs. Computer And Technologies | General Mills vs. FONIX MOBILE PLC | General Mills vs. Major Drilling Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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