Correlation Between Salesforce and Global Infrastructure
Can any of the company-specific risk be diversified away by investing in both Salesforce and Global Infrastructure 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 Global Infrastructure into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Global Infrastructure Fund, you can compare the effects of market volatilities on Salesforce and Global Infrastructure 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 Global Infrastructure. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Global Infrastructure.
Diversification Opportunities for Salesforce and Global Infrastructure
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Salesforce and Global is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Global Infrastructure Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Infrastructure 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 Global Infrastructure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Infrastructure has no effect on the direction of Salesforce i.e., Salesforce and Global Infrastructure go up and down completely randomly.
Pair Corralation between Salesforce and Global Infrastructure
Considering the 90-day investment horizon Salesforce is expected to generate 2.75 times more return on investment than Global Infrastructure. However, Salesforce is 2.75 times more volatile than Global Infrastructure Fund. It trades about 0.16 of its potential returns per unit of risk. Global Infrastructure Fund is currently generating about 0.13 per unit of risk. If you would invest 23,588 in Salesforce on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Salesforce or generate 39.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Salesforce vs. Global Infrastructure Fund
Performance |
| Timeline |
| Salesforce |
| Global Infrastructure |
Salesforce and Global Infrastructure Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Global Infrastructure
The main advantage of trading using opposite Salesforce and Global Infrastructure positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Global Infrastructure 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 Global Infrastructure will offset losses from the drop in Global Infrastructure's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Global Infrastructure vs. Franklin Emerging Market | Global Infrastructure vs. Investec Emerging Markets | Global Infrastructure vs. Black Oak Emerging | Global Infrastructure vs. Goldman Sachs Emerging |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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