Correlation Between Salesforce and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Salesforce and Hercules Capital 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 Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Hercules Capital, you can compare the effects of market volatilities on Salesforce and Hercules Capital 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 Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Hercules Capital.
Diversification Opportunities for Salesforce and Hercules Capital
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Hercules is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital 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 Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Salesforce i.e., Salesforce and Hercules Capital go up and down completely randomly.
Pair Corralation between Salesforce and Hercules Capital
Considering the 90-day investment horizon Salesforce is expected to generate 1.63 times more return on investment than Hercules Capital. However, Salesforce is 1.63 times more volatile than Hercules Capital. It trades about 0.34 of its potential returns per unit of risk. Hercules Capital is currently generating about -0.15 per unit of risk. If you would invest 29,377 in Salesforce on August 27, 2024 and sell it today you would earn a total of 4,534 from holding Salesforce or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Hercules Capital
Performance |
| Timeline |
| Salesforce |
| Hercules Capital |
Salesforce and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Hercules Capital
The main advantage of trading using opposite Salesforce and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Hercules Capital 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Hercules Capital vs. Main Street Capital | Hercules Capital vs. PennantPark Floating Rate | Hercules Capital vs. FS KKR Capital | Hercules Capital vs. Prospect Capital |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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