Correlation Between Salesforce and Bank Central
Can any of the company-specific risk be diversified away by investing in both Salesforce and Bank Central 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 Bank Central into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Bank Central Asia, you can compare the effects of market volatilities on Salesforce and Bank Central 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 Bank Central. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Bank Central.
Diversification Opportunities for Salesforce and Bank Central
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Bank is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Bank Central Asia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank Central Asia 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 Bank Central. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank Central Asia has no effect on the direction of Salesforce i.e., Salesforce and Bank Central go up and down completely randomly.
Pair Corralation between Salesforce and Bank Central
Considering the 90-day investment horizon Salesforce is expected to generate 1.16 times more return on investment than Bank Central. However, Salesforce is 1.16 times more volatile than Bank Central Asia. It trades about 0.3 of its potential returns per unit of risk. Bank Central Asia is currently generating about -0.19 per unit of risk. If you would invest 27,576 in Salesforce on August 27, 2024 and sell it today you would earn a total of 6,626 from holding Salesforce or generate 24.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Bank Central Asia
Performance |
| Timeline |
| Salesforce |
| Bank Central Asia |
Salesforce and Bank Central Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Bank Central
The main advantage of trading using opposite Salesforce and Bank Central positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Bank Central 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 Bank Central will offset losses from the drop in Bank Central's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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