Correlation Between Salesforce and Hennessy Capital
Can any of the company-specific risk be diversified away by investing in both Salesforce and Hennessy 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 Hennessy Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Hennessy Capital Investment, you can compare the effects of market volatilities on Salesforce and Hennessy 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 Hennessy Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Hennessy Capital.
Diversification Opportunities for Salesforce and Hennessy Capital
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Hennessy is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Hennessy Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Capital Inv 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 Hennessy Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Capital Inv has no effect on the direction of Salesforce i.e., Salesforce and Hennessy Capital go up and down completely randomly.
Pair Corralation between Salesforce and Hennessy Capital
Considering the 90-day investment horizon Salesforce is expected to generate 0.98 times more return on investment than Hennessy Capital. However, Salesforce is 1.02 times less risky than Hennessy Capital. It trades about 0.16 of its potential returns per unit of risk. Hennessy Capital Investment is currently generating about -0.02 per unit of risk. If you would invest 23,588 in Salesforce on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Salesforce or generate 39.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Hennessy Capital Investment
Performance |
| Timeline |
| Salesforce |
| Hennessy Capital Inv |
Salesforce and Hennessy Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Hennessy Capital
The main advantage of trading using opposite Salesforce and Hennessy Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Hennessy 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 Hennessy Capital will offset losses from the drop in Hennessy Capital's 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |