Correlation Between Salesforce and Obsidian Energy
Can any of the company-specific risk be diversified away by investing in both Salesforce and Obsidian 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 Obsidian Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Obsidian Energy, you can compare the effects of market volatilities on Salesforce and Obsidian 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 Obsidian Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Obsidian Energy.
Diversification Opportunities for Salesforce and Obsidian Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Obsidian is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Obsidian Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Obsidian 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 Obsidian Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Obsidian Energy has no effect on the direction of Salesforce i.e., Salesforce and Obsidian Energy go up and down completely randomly.
Pair Corralation between Salesforce and Obsidian Energy
Considering the 90-day investment horizon Salesforce is expected to generate 0.74 times more return on investment than Obsidian Energy. However, Salesforce is 1.36 times less risky than Obsidian Energy. It trades about 0.1 of its potential returns per unit of risk. Obsidian Energy is currently generating about 0.0 per unit of risk. If you would invest 13,053 in Salesforce on August 30, 2024 and sell it today you would earn a total of 19,948 from holding Salesforce or generate 152.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Obsidian Energy
Performance |
| Timeline |
| Salesforce |
| Obsidian Energy |
Salesforce and Obsidian Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Obsidian Energy
The main advantage of trading using opposite Salesforce and Obsidian Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Obsidian 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 Obsidian Energy will offset losses from the drop in Obsidian Energy's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Obsidian Energy vs. Devon Energy | Obsidian Energy vs. ConocoPhillips | Obsidian Energy vs. Diamondback Energy | Obsidian Energy vs. Occidental Petroleum |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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