Correlation Between Salesforce and Hallador Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and Hallador Energy 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 Hallador Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Hallador Energy, you can compare the effects of market volatilities on Salesforce and Hallador Energy 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 Hallador Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Hallador Energy.
Diversification Opportunities for Salesforce and Hallador Energy
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Salesforce and Hallador is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Hallador Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hallador Energy 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 Hallador Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hallador Energy has no effect on the direction of Salesforce i.e., Salesforce and Hallador Energy go up and down completely randomly.
Pair Corralation between Salesforce and Hallador Energy
Considering the 90-day investment horizon Salesforce is expected to generate 1.67 times less return on investment than Hallador Energy. But when comparing it to its historical volatility, Salesforce is 3.42 times less risky than Hallador Energy. It trades about 0.34 of its potential returns per unit of risk. Hallador Energy is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,043 in Hallador Energy on August 28, 2024 and sell it today you would earn a total of 231.00 from holding Hallador Energy or generate 22.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Hallador Energy
Performance |
| Timeline |
| Salesforce |
| Hallador Energy |
Salesforce and Hallador Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Hallador Energy
The main advantage of trading using opposite Salesforce and Hallador Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Hallador Energy 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 Hallador Energy will offset losses from the drop in Hallador Energy's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Hallador Energy vs. Natural Resource Partners | Hallador Energy vs. Consol Energy | Hallador Energy vs. Adaro Energy Tbk | Hallador Energy vs. Alliance Resource Partners |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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