Correlation Between Salesforce and PEAK Old
Can any of the company-specific risk be diversified away by investing in both Salesforce and PEAK Old 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 PEAK Old into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and PEAK Old, you can compare the effects of market volatilities on Salesforce and PEAK Old 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 PEAK Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and PEAK Old.
Diversification Opportunities for Salesforce and PEAK Old
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and PEAK is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and PEAK Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEAK Old 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 PEAK Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEAK Old has no effect on the direction of Salesforce i.e., Salesforce and PEAK Old go up and down completely randomly.
Pair Corralation between Salesforce and PEAK Old
Considering the 90-day investment horizon Salesforce is expected to generate 1.26 times more return on investment than PEAK Old. However, Salesforce is 1.26 times more volatile than PEAK Old. It trades about 0.11 of its potential returns per unit of risk. PEAK Old is currently generating about -0.04 per unit of risk. If you would invest 12,990 in Salesforce on August 28, 2024 and sell it today you would earn a total of 20,921 from holding Salesforce or generate 161.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 31.72% |
| Values | Daily Returns |
Salesforce vs. PEAK Old
Performance |
| Timeline |
| Salesforce |
| PEAK Old |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and PEAK Old Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and PEAK Old
The main advantage of trading using opposite Salesforce and PEAK Old positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, PEAK Old 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 PEAK Old will offset losses from the drop in PEAK Old's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| PEAK Old vs. Welltower | PEAK Old vs. Mid America Apartment Communities | PEAK Old vs. Regency Centers | PEAK Old vs. UDR Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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