Correlation Between Salesforce and MEG Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and MEG Energy 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 MEG Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and MEG Energy Corp, you can compare the effects of market volatilities on Salesforce and MEG Energy 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 MEG Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and MEG Energy.
Diversification Opportunities for Salesforce and MEG Energy
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and MEG is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and MEG Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEG Energy Corp 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 MEG Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEG Energy Corp has no effect on the direction of Salesforce i.e., Salesforce and MEG Energy go up and down completely randomly.
Pair Corralation between Salesforce and MEG Energy
Considering the 90-day investment horizon Salesforce is expected to generate 0.95 times more return on investment than MEG Energy. However, Salesforce is 1.06 times less risky than MEG Energy. It trades about 0.34 of its potential returns per unit of risk. MEG Energy Corp is currently generating about 0.06 per unit of risk. If you would invest 29,377 in Salesforce on August 28, 2024 and sell it today you would earn a total of 4,534 from holding Salesforce or generate 15.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. MEG Energy Corp
Performance |
| Timeline |
| Salesforce |
| MEG Energy Corp |
Salesforce and MEG Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and MEG Energy
The main advantage of trading using opposite Salesforce and MEG Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, MEG Energy 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 MEG Energy will offset losses from the drop in MEG Energy's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| MEG Energy vs. Baytex Energy Corp | MEG Energy vs. Whitecap Resources | MEG Energy vs. Tamarack Valley Energy | MEG Energy vs. ARC Resources |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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