Correlation Between Salesforce and Linc AB
Can any of the company-specific risk be diversified away by investing in both Salesforce and Linc AB 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 Linc AB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Linc AB, you can compare the effects of market volatilities on Salesforce and Linc AB 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 Linc AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Linc AB.
Diversification Opportunities for Salesforce and Linc AB
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Linc is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Linc AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linc AB 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 Linc AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linc AB has no effect on the direction of Salesforce i.e., Salesforce and Linc AB go up and down completely randomly.
Pair Corralation between Salesforce and Linc AB
Considering the 90-day investment horizon Salesforce is expected to generate 1.26 times more return on investment than Linc AB. However, Salesforce is 1.26 times more volatile than Linc AB. It trades about 0.22 of its potential returns per unit of risk. Linc AB is currently generating about -0.24 per unit of risk. If you would invest 28,091 in Salesforce on September 3, 2024 and sell it today you would earn a total of 4,908 from holding Salesforce or generate 17.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Salesforce vs. Linc AB
Performance |
| Timeline |
| Salesforce |
| Linc AB |
Salesforce and Linc AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Linc AB
The main advantage of trading using opposite Salesforce and Linc AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Linc AB 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 Linc AB will offset losses from the drop in Linc AB's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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