Correlation Between Salesforce and Generation Capital
Can any of the company-specific risk be diversified away by investing in both Salesforce and Generation Capital 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 Generation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Generation Capital, you can compare the effects of market volatilities on Salesforce and Generation Capital 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 Generation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Generation Capital.
Diversification Opportunities for Salesforce and Generation Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Generation is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Generation Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generation Capital 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 Generation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generation Capital has no effect on the direction of Salesforce i.e., Salesforce and Generation Capital go up and down completely randomly.
Pair Corralation between Salesforce and Generation Capital
Considering the 90-day investment horizon Salesforce is expected to generate 0.84 times more return on investment than Generation Capital. However, Salesforce is 1.18 times less risky than Generation Capital. It trades about 0.06 of its potential returns per unit of risk. Generation Capital is currently generating about 0.03 per unit of risk. If you would invest 26,198 in Salesforce on August 25, 2024 and sell it today you would earn a total of 8,004 from holding Salesforce or generate 30.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 75.55% |
| Values | Daily Returns |
Salesforce vs. Generation Capital
Performance |
| Timeline |
| Salesforce |
| Generation Capital |
Salesforce and Generation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Generation Capital
The main advantage of trading using opposite Salesforce and Generation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Generation Capital 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 Generation Capital will offset losses from the drop in Generation Capital's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Generation Capital vs. EN Shoham Business | Generation Capital vs. Mivtach Shamir | Generation Capital vs. Enlight Renewable Energy | Generation Capital vs. Rani Zim Shopping |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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