Correlation Between Salesforce and NEBL
Can any of the company-specific risk be diversified away by investing in both Salesforce and NEBL 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 NEBL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and NEBL, you can compare the effects of market volatilities on Salesforce and NEBL 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 NEBL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and NEBL.
Diversification Opportunities for Salesforce and NEBL
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and NEBL is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and NEBL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEBL 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 NEBL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEBL has no effect on the direction of Salesforce i.e., Salesforce and NEBL go up and down completely randomly.
Pair Corralation between Salesforce and NEBL
Considering the 90-day investment horizon Salesforce is expected to generate 9.32 times less return on investment than NEBL. But when comparing it to its historical volatility, Salesforce is 5.27 times less risky than NEBL. It trades about 0.25 of its potential returns per unit of risk. NEBL is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 0.26 in NEBL on September 2, 2024 and sell it today you would earn a total of 0.44 from holding NEBL or generate 173.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. NEBL
Performance |
| Timeline |
| Salesforce |
| NEBL |
Salesforce and NEBL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and NEBL
The main advantage of trading using opposite Salesforce and NEBL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, NEBL 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 NEBL will offset losses from the drop in NEBL's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |