Correlation Between Salesforce and Prospector Capital
Can any of the company-specific risk be diversified away by investing in both Salesforce and Prospector Capital 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 Prospector Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Prospector Capital Corp, you can compare the effects of market volatilities on Salesforce and Prospector Capital 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 Prospector Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Prospector Capital.
Diversification Opportunities for Salesforce and Prospector Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Prospector is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Prospector Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospector Capital Corp 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 Prospector Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospector Capital Corp has no effect on the direction of Salesforce i.e., Salesforce and Prospector Capital go up and down completely randomly.
Pair Corralation between Salesforce and Prospector Capital
If you would invest 20,650 in Salesforce on September 1, 2024 and sell it today you would earn a total of 12,349 from holding Salesforce or generate 59.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.37% |
| Values | Daily Returns |
Salesforce vs. Prospector Capital Corp
Performance |
| Timeline |
| Salesforce |
| Prospector Capital Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and Prospector Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Prospector Capital
The main advantage of trading using opposite Salesforce and Prospector Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Prospector Capital 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 Prospector Capital will offset losses from the drop in Prospector Capital's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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