Correlation Between Salesforce and John Hancock
Can any of the company-specific risk be diversified away by investing in both Salesforce and John Hancock 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 John Hancock into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and John Hancock Exchange, you can compare the effects of market volatilities on Salesforce and John Hancock 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 John Hancock. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and John Hancock.
Diversification Opportunities for Salesforce and John Hancock
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and John is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and John Hancock Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on John Hancock 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 John Hancock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of John Hancock Exchange has no effect on the direction of Salesforce i.e., Salesforce and John Hancock go up and down completely randomly.
Pair Corralation between Salesforce and John Hancock
Considering the 90-day investment horizon Salesforce is expected to generate 3.41 times more return on investment than John Hancock. However, Salesforce is 3.41 times more volatile than John Hancock Exchange. It trades about 0.21 of its potential returns per unit of risk. John Hancock Exchange is currently generating about 0.16 per unit of risk. If you would invest 29,889 in Salesforce on August 30, 2024 and sell it today you would earn a total of 3,112 from holding Salesforce or generate 10.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. John Hancock Exchange
Performance |
| Timeline |
| Salesforce |
| John Hancock Exchange |
Salesforce and John Hancock Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and John Hancock
The main advantage of trading using opposite Salesforce and John Hancock positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, John Hancock 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 John Hancock will offset losses from the drop in John Hancock's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| John Hancock vs. iShares MSCI USA | John Hancock vs. ABIVAX Socit Anonyme | John Hancock vs. HUMANA INC | John Hancock vs. SCOR PK |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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