Correlation Between Salesforce and Platinum
Can any of the company-specific risk be diversified away by investing in both Salesforce and Platinum 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 Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Platinum, you can compare the effects of market volatilities on Salesforce and Platinum 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 Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Platinum.
Diversification Opportunities for Salesforce and Platinum
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and Platinum is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum 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 Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum has no effect on the direction of Salesforce i.e., Salesforce and Platinum go up and down completely randomly.
Pair Corralation between Salesforce and Platinum
Considering the 90-day investment horizon Salesforce is expected to generate 1.49 times more return on investment than Platinum. However, Salesforce is 1.49 times more volatile than Platinum. It trades about 0.09 of its potential returns per unit of risk. Platinum is currently generating about -0.03 per unit of risk. If you would invest 26,899 in Salesforce on August 25, 2024 and sell it today you would earn a total of 7,303 from holding Salesforce or generate 27.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.95% |
| Values | Daily Returns |
Salesforce vs. Platinum
Performance |
| Timeline |
| Salesforce |
| Platinum |
Salesforce and Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Platinum
The main advantage of trading using opposite Salesforce and Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Platinum 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 Platinum will offset losses from the drop in Platinum's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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