Correlation Between Salesforce and Koppers Holdings
Can any of the company-specific risk be diversified away by investing in both Salesforce and Koppers Holdings 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 Koppers Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Koppers Holdings, you can compare the effects of market volatilities on Salesforce and Koppers Holdings 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 Koppers Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Koppers Holdings.
Diversification Opportunities for Salesforce and Koppers Holdings
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Koppers is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Koppers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koppers Holdings 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 Koppers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koppers Holdings has no effect on the direction of Salesforce i.e., Salesforce and Koppers Holdings go up and down completely randomly.
Pair Corralation between Salesforce and Koppers Holdings
Considering the 90-day investment horizon Salesforce is expected to generate 0.78 times more return on investment than Koppers Holdings. However, Salesforce is 1.29 times less risky than Koppers Holdings. It trades about 0.27 of its potential returns per unit of risk. Koppers Holdings is currently generating about 0.01 per unit of risk. If you would invest 24,767 in Salesforce on August 31, 2024 and sell it today you would earn a total of 8,234 from holding Salesforce or generate 33.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Koppers Holdings
Performance |
| Timeline |
| Salesforce |
| Koppers Holdings |
Salesforce and Koppers Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Koppers Holdings
The main advantage of trading using opposite Salesforce and Koppers Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Koppers Holdings 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 Koppers Holdings will offset losses from the drop in Koppers Holdings' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Koppers Holdings vs. H B Fuller | Koppers Holdings vs. Minerals Technologies | Koppers Holdings vs. Quaker Chemical | Koppers Holdings vs. Oil Dri |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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