Correlation Between Salesforce and Magellan Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and Magellan 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 Magellan Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Magellan Energy, you can compare the effects of market volatilities on Salesforce and Magellan 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 Magellan Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Magellan Energy.
Diversification Opportunities for Salesforce and Magellan Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Magellan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Magellan Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magellan Energy 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 Magellan Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magellan Energy has no effect on the direction of Salesforce i.e., Salesforce and Magellan Energy go up and down completely randomly.
Pair Corralation between Salesforce and Magellan Energy
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 | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Salesforce vs. Magellan Energy
Performance |
Timeline |
Salesforce |
Magellan Energy |
Salesforce and Magellan Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salesforce and Magellan Energy
The main advantage of trading using opposite Salesforce and Magellan Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Magellan 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 Magellan Energy will offset losses from the drop in Magellan Energy'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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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