Correlation Between Salesforce and HK Electric
Can any of the company-specific risk be diversified away by investing in both Salesforce and HK Electric 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 HK Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and HK Electric Investments, you can compare the effects of market volatilities on Salesforce and HK Electric 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 HK Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and HK Electric.
Diversification Opportunities for Salesforce and HK Electric
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and HKT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and HK Electric Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HK Electric Investments 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 HK Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HK Electric Investments has no effect on the direction of Salesforce i.e., Salesforce and HK Electric go up and down completely randomly.
Pair Corralation between Salesforce and HK Electric
Considering the 90-day investment horizon Salesforce is expected to generate 2.33 times less return on investment than HK Electric. But when comparing it to its historical volatility, Salesforce is 1.64 times less risky than HK Electric. It trades about 0.07 of its potential returns per unit of risk. HK Electric Investments is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 22.00 in HK Electric Investments on September 1, 2024 and sell it today you would earn a total of 40.00 from holding HK Electric Investments or generate 181.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.89% |
| Values | Daily Returns |
Salesforce vs. HK Electric Investments
Performance |
| Timeline |
| Salesforce |
| HK Electric Investments |
Salesforce and HK Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and HK Electric
The main advantage of trading using opposite Salesforce and HK Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, HK Electric 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 HK Electric will offset losses from the drop in HK Electric's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc | HK Electric vs. Apple Inc |
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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