Correlation Between Salesforce and Marks
Can any of the company-specific risk be diversified away by investing in both Salesforce and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Marks and Spencer, you can compare the effects of market volatilities on Salesforce and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Marks.
Diversification Opportunities for Salesforce and Marks
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and Marks is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of Salesforce i.e., Salesforce and Marks go up and down completely randomly.
Pair Corralation between Salesforce and Marks
Considering the 90-day investment horizon Salesforce is expected to generate 0.44 times more return on investment than Marks. However, Salesforce is 2.27 times less risky than Marks. It trades about 0.25 of its potential returns per unit of risk. Marks and Spencer is currently generating about 0.04 per unit of risk. If you would invest 25,250 in Salesforce on August 30, 2024 and sell it today you would earn a total of 7,751 from holding Salesforce or generate 30.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Marks and Spencer
Performance |
| Timeline |
| Salesforce |
| Marks and Spencer |
Salesforce and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Marks
The main advantage of trading using opposite Salesforce and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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