Correlation Between Salesforce and NewMed Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and NewMed 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 NewMed Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and NewMed Energy , you can compare the effects of market volatilities on Salesforce and NewMed 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 NewMed Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and NewMed Energy.
Diversification Opportunities for Salesforce and NewMed Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and NewMed is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and NewMed Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewMed 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 NewMed Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewMed Energy has no effect on the direction of Salesforce i.e., Salesforce and NewMed Energy go up and down completely randomly.
Pair Corralation between Salesforce and NewMed Energy
Considering the 90-day investment horizon Salesforce is expected to generate 1.31 times more return on investment than NewMed Energy. However, Salesforce is 1.31 times more volatile than NewMed Energy . It trades about 0.35 of its potential returns per unit of risk. NewMed Energy is currently generating about 0.27 per unit of risk. If you would invest 29,377 in Salesforce on August 29, 2024 and sell it today you would earn a total of 4,941 from holding Salesforce or generate 16.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 82.61% |
| Values | Daily Returns |
Salesforce vs. NewMed Energy
Performance |
| Timeline |
| Salesforce |
| NewMed Energy |
Salesforce and NewMed Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and NewMed Energy
The main advantage of trading using opposite Salesforce and NewMed Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, NewMed 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 NewMed Energy will offset losses from the drop in NewMed Energy's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| NewMed Energy vs. Global Knafaim Leasing | NewMed Energy vs. IDI Insurance | NewMed Energy vs. Israel China Biotechnology | NewMed Energy vs. One Software Technologies |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |