Correlation Between Salesforce and Komax Holding

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Can any of the company-specific risk be diversified away by investing in both Salesforce and Komax Holding 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 Komax Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Komax Holding AG, you can compare the effects of market volatilities on Salesforce and Komax Holding 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 Komax Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Komax Holding.

Diversification Opportunities for Salesforce and Komax Holding

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Salesforce and Komax is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Komax Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Komax Holding AG 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 Komax Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Komax Holding AG has no effect on the direction of Salesforce i.e., Salesforce and Komax Holding go up and down completely randomly.

Pair Corralation between Salesforce and Komax Holding

Considering the 90-day investment horizon Salesforce is expected to generate 5.18 times less return on investment than Komax Holding. But when comparing it to its historical volatility, Salesforce is 2.87 times less risky than Komax Holding. It trades about 0.1 of its potential returns per unit of risk. Komax Holding AG is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  11,560  in Komax Holding AG on November 1, 2024 and sell it today you would earn a total of  1,800  from holding Komax Holding AG or generate 15.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy95.0%
ValuesDaily Returns

Salesforce  vs.  Komax Holding AG

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
Komax Holding AG 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Komax Holding AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Komax Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Salesforce and Komax Holding Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Komax Holding

The main advantage of trading using opposite Salesforce and Komax Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Komax Holding 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 Komax Holding will offset losses from the drop in Komax Holding's long position.
The idea behind Salesforce and Komax Holding AG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.

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