Correlation Between Salesforce and Henderson European
Can any of the company-specific risk be diversified away by investing in both Salesforce and Henderson European 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 Henderson European into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Henderson European Focus, you can compare the effects of market volatilities on Salesforce and Henderson European 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 Henderson European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Henderson European.
Diversification Opportunities for Salesforce and Henderson European
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Henderson is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Henderson European Focus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson European Focus 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 Henderson European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson European Focus has no effect on the direction of Salesforce i.e., Salesforce and Henderson European go up and down completely randomly.
Pair Corralation between Salesforce and Henderson European
Considering the 90-day investment horizon Salesforce is expected to generate 2.2 times more return on investment than Henderson European. However, Salesforce is 2.2 times more volatile than Henderson European Focus. It trades about 0.08 of its potential returns per unit of risk. Henderson European Focus is currently generating about 0.05 per unit of risk. If you would invest 16,270 in Salesforce on November 19, 2024 and sell it today you would earn a total of 16,384 from holding Salesforce or generate 100.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Salesforce vs. Henderson European Focus
Performance |
| Timeline |
| Salesforce |
| Henderson European Focus |
Salesforce and Henderson European Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Henderson European
The main advantage of trading using opposite Salesforce and Henderson European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Henderson European 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 Henderson European will offset losses from the drop in Henderson European's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Henderson European vs. Henderson Global Equity | Henderson European vs. Loomis Sayles Strategic | Henderson European vs. First Eagle Overseas | Henderson European vs. Henderson European Focus |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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