Correlation Between Salesforce and Manila Electric
Can any of the company-specific risk be diversified away by investing in both Salesforce and Manila Electric 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 Manila Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Manila Electric Co, you can compare the effects of market volatilities on Salesforce and Manila Electric 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 Manila Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Manila Electric.
Diversification Opportunities for Salesforce and Manila Electric
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Manila is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Manila Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Electric 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 Manila Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Electric has no effect on the direction of Salesforce i.e., Salesforce and Manila Electric go up and down completely randomly.
Pair Corralation between Salesforce and Manila Electric
Considering the 90-day investment horizon Salesforce is expected to generate 1.15 times more return on investment than Manila Electric. However, Salesforce is 1.15 times more volatile than Manila Electric Co. It trades about 0.07 of its potential returns per unit of risk. Manila Electric Co is currently generating about 0.08 per unit of risk. If you would invest 20,860 in Salesforce on August 31, 2024 and sell it today you would earn a total of 12,139 from holding Salesforce or generate 58.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.06% |
| Values | Daily Returns |
Salesforce vs. Manila Electric Co
Performance |
| Timeline |
| Salesforce |
| Manila Electric |
Salesforce and Manila Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Manila Electric
The main advantage of trading using opposite Salesforce and Manila Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Manila Electric 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 Manila Electric will offset losses from the drop in Manila Electric's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Manila Electric vs. Semirara Mining Corp | Manila Electric vs. Philex Mining Corp | Manila Electric vs. Metropolitan Bank Trust | Manila Electric vs. Lepanto Consolidated Mining |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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