Correlation Between Salesforce and IndexIQ Active
Can any of the company-specific risk be diversified away by investing in both Salesforce and IndexIQ Active 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 IndexIQ Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and IndexIQ Active ETF, you can compare the effects of market volatilities on Salesforce and IndexIQ Active 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 IndexIQ Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and IndexIQ Active.
Diversification Opportunities for Salesforce and IndexIQ Active
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and IndexIQ is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and IndexIQ Active ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IndexIQ Active ETF 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 IndexIQ Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IndexIQ Active ETF has no effect on the direction of Salesforce i.e., Salesforce and IndexIQ Active go up and down completely randomly.
Pair Corralation between Salesforce and IndexIQ Active
Considering the 90-day investment horizon Salesforce is expected to generate 11.1 times more return on investment than IndexIQ Active. However, Salesforce is 11.1 times more volatile than IndexIQ Active ETF. It trades about 0.08 of its potential returns per unit of risk. IndexIQ Active ETF is currently generating about 0.05 per unit of risk. If you would invest 17,009 in Salesforce on October 25, 2024 and sell it today you would earn a total of 16,457 from holding Salesforce or generate 96.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. IndexIQ Active ETF
Performance |
| Timeline |
| Salesforce |
| IndexIQ Active ETF |
Salesforce and IndexIQ Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and IndexIQ Active
The main advantage of trading using opposite Salesforce and IndexIQ Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, IndexIQ Active 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 IndexIQ Active will offset losses from the drop in IndexIQ Active's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| IndexIQ Active vs. BlackRock High Yield | IndexIQ Active vs. Dimensional ETF Trust | IndexIQ Active vs. JP Morgan Exchange Traded | IndexIQ Active vs. Janus Detroit Street |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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