Correlation Between Salesforce and Hong Kong
Can any of the company-specific risk be diversified away by investing in both Salesforce and Hong Kong 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 Hong Kong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Hong Kong Exchange, you can compare the effects of market volatilities on Salesforce and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Hong Kong.
Diversification Opportunities for Salesforce and Hong Kong
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Hong is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Hong Kong Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchange 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchange has no effect on the direction of Salesforce i.e., Salesforce and Hong Kong go up and down completely randomly.
Pair Corralation between Salesforce and Hong Kong
Considering the 90-day investment horizon Salesforce is expected to generate 0.81 times more return on investment than Hong Kong. However, Salesforce is 1.24 times less risky than Hong Kong. It trades about 0.35 of its potential returns per unit of risk. Hong Kong Exchange is currently generating about -0.18 per unit of risk. If you would invest 29,377 in Salesforce on August 29, 2024 and sell it today you would earn a total of 4,941 from holding Salesforce or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Hong Kong Exchange
Performance |
| Timeline |
| Salesforce |
| Hong Kong Exchange |
Salesforce and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Hong Kong
The main advantage of trading using opposite Salesforce and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |