Correlation Between Salesforce and Magnis Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and Magnis 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 Magnis Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Magnis Energy Technologies, you can compare the effects of market volatilities on Salesforce and Magnis 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 Magnis Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Magnis Energy.
Diversification Opportunities for Salesforce and Magnis Energy
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Magnis is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Magnis Energy Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnis Energy Techno 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 Magnis Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnis Energy Techno has no effect on the direction of Salesforce i.e., Salesforce and Magnis Energy go up and down completely randomly.
Pair Corralation between Salesforce and Magnis Energy
Considering the 90-day investment horizon Salesforce is expected to generate 2.87 times less return on investment than Magnis Energy. But when comparing it to its historical volatility, Salesforce is 3.78 times less risky than Magnis Energy. It trades about 0.28 of its potential returns per unit of risk. Magnis Energy Technologies is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Magnis Energy Technologies on September 1, 2024 and sell it today you would earn a total of 0.75 from holding Magnis Energy Technologies or generate 37.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. Magnis Energy Technologies
Performance |
| Timeline |
| Salesforce |
| Magnis Energy Techno |
Salesforce and Magnis Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Magnis Energy
The main advantage of trading using opposite Salesforce and Magnis Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Magnis 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 Magnis Energy will offset losses from the drop in Magnis Energy's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Magnis Energy vs. AFC Energy plc | Magnis Energy vs. Loop Energy | Magnis Energy vs. Sunrise New Energy | Magnis Energy vs. Energizer Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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