Correlation Between Salesforce and Halcyon Technology
Can any of the company-specific risk be diversified away by investing in both Salesforce and Halcyon Technology 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 Halcyon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Halcyon Technology Public, you can compare the effects of market volatilities on Salesforce and Halcyon Technology 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 Halcyon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Halcyon Technology.
Diversification Opportunities for Salesforce and Halcyon Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Halcyon is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Halcyon Technology Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halcyon Technology Public 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 Halcyon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halcyon Technology Public has no effect on the direction of Salesforce i.e., Salesforce and Halcyon Technology go up and down completely randomly.
Pair Corralation between Salesforce and Halcyon Technology
Considering the 90-day investment horizon Salesforce is expected to generate 4.26 times less return on investment than Halcyon Technology. But when comparing it to its historical volatility, Salesforce is 1.55 times less risky than Halcyon Technology. It trades about 0.02 of its potential returns per unit of risk. Halcyon Technology Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 243.00 in Halcyon Technology Public on December 12, 2024 and sell it today you would earn a total of 69.00 from holding Halcyon Technology Public or generate 28.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.57% |
| Values | Daily Returns |
Salesforce vs. Halcyon Technology Public
Performance |
| Timeline |
| Salesforce |
| Halcyon Technology Public |
Salesforce and Halcyon Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Halcyon Technology
The main advantage of trading using opposite Salesforce and Halcyon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Halcyon Technology 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 Halcyon Technology will offset losses from the drop in Halcyon Technology's long position.| Salesforce vs. Zoom Video Communications | ||
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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