Correlation Between Salesforce and Kraft Bank
Can any of the company-specific risk be diversified away by investing in both Salesforce and Kraft Bank 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 Kraft Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Kraft Bank Asa, you can compare the effects of market volatilities on Salesforce and Kraft Bank 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 Kraft Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Kraft Bank.
Diversification Opportunities for Salesforce and Kraft Bank
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and Kraft is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Kraft Bank Asa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kraft Bank Asa 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 Kraft Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kraft Bank Asa has no effect on the direction of Salesforce i.e., Salesforce and Kraft Bank go up and down completely randomly.
Pair Corralation between Salesforce and Kraft Bank
Considering the 90-day investment horizon Salesforce is expected to generate 0.89 times more return on investment than Kraft Bank. However, Salesforce is 1.12 times less risky than Kraft Bank. It trades about 0.35 of its potential returns per unit of risk. Kraft Bank Asa is currently generating about -0.17 per unit of risk. If you would invest 29,377 in Salesforce on August 29, 2024 and sell it today you would earn a total of 4,941 from holding Salesforce or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Kraft Bank Asa
Performance |
| Timeline |
| Salesforce |
| Kraft Bank Asa |
Salesforce and Kraft Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Kraft Bank
The main advantage of trading using opposite Salesforce and Kraft Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Kraft Bank 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 Kraft Bank will offset losses from the drop in Kraft Bank's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Kraft Bank vs. Eidesvik Offshore ASA | Kraft Bank vs. Romerike Sparebank | Kraft Bank vs. Melhus Sparebank | Kraft Bank vs. Sea1 Offshore |
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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