Correlation Between Salesforce and PUMA SE
Can any of the company-specific risk be diversified away by investing in both Salesforce and PUMA SE 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 PUMA SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and PUMA SE, you can compare the effects of market volatilities on Salesforce and PUMA SE 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 PUMA SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and PUMA SE.
Diversification Opportunities for Salesforce and PUMA SE
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and PUMA is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and PUMA SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA SE 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 PUMA SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA SE has no effect on the direction of Salesforce i.e., Salesforce and PUMA SE go up and down completely randomly.
Pair Corralation between Salesforce and PUMA SE
Considering the 90-day investment horizon Salesforce is expected to generate 0.84 times more return on investment than PUMA SE. However, Salesforce is 1.19 times less risky than PUMA SE. It trades about 0.26 of its potential returns per unit of risk. PUMA SE is currently generating about 0.1 per unit of risk. If you would invest 25,849 in Salesforce on August 28, 2024 and sell it today you would earn a total of 8,062 from holding Salesforce or generate 31.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. PUMA SE
Performance |
| Timeline |
| Salesforce |
| PUMA SE |
Salesforce and PUMA SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and PUMA SE
The main advantage of trading using opposite Salesforce and PUMA SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, PUMA SE 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 PUMA SE will offset losses from the drop in PUMA SE's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| PUMA SE vs. American Rebel Holdings | PUMA SE vs. American Rebel Holdings | PUMA SE vs. Crocs Inc | PUMA SE vs. On Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |