Correlation Between Salesforce and Great West
Can any of the company-specific risk be diversified away by investing in both Salesforce and Great West 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 Great West into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Great West Lifeco, you can compare the effects of market volatilities on Salesforce and Great West 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 Great West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Great West.
Diversification Opportunities for Salesforce and Great West
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Great is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Great West Lifeco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great West Lifeco 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 Great West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great West Lifeco has no effect on the direction of Salesforce i.e., Salesforce and Great West go up and down completely randomly.
Pair Corralation between Salesforce and Great West
Considering the 90-day investment horizon Salesforce is expected to generate 2.86 times more return on investment than Great West. However, Salesforce is 2.86 times more volatile than Great West Lifeco. It trades about 0.07 of its potential returns per unit of risk. Great West Lifeco is currently generating about 0.07 per unit of risk. If you would invest 21,436 in Salesforce on September 1, 2024 and sell it today you would earn a total of 11,563 from holding Salesforce or generate 53.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Great West Lifeco
Performance |
| Timeline |
| Salesforce |
| Great West Lifeco |
Salesforce and Great West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Great West
The main advantage of trading using opposite Salesforce and Great West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Great West 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 Great West will offset losses from the drop in Great West's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Great West vs. Richelieu Hardware | Great West vs. Cogeco Communications | Great West vs. Quisitive Technology Solutions | Great West vs. Rogers Communications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |