Correlation Between Salesforce and SL Green
Can any of the company-specific risk be diversified away by investing in both Salesforce and SL Green 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 SL Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and SL Green Realty, you can compare the effects of market volatilities on Salesforce and SL Green 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 SL Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and SL Green.
Diversification Opportunities for Salesforce and SL Green
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and S1LG34 is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SL Green Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SL Green Realty 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 SL Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SL Green Realty has no effect on the direction of Salesforce i.e., Salesforce and SL Green go up and down completely randomly.
Pair Corralation between Salesforce and SL Green
Considering the 90-day investment horizon Salesforce is expected to generate 0.92 times more return on investment than SL Green. However, Salesforce is 1.08 times less risky than SL Green. It trades about 0.24 of its potential returns per unit of risk. SL Green Realty is currently generating about 0.15 per unit of risk. If you would invest 29,801 in Salesforce on September 3, 2024 and sell it today you would earn a total of 3,300 from holding Salesforce or generate 11.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.0% |
| Values | Daily Returns |
Salesforce vs. SL Green Realty
Performance |
| Timeline |
| Salesforce |
| SL Green Realty |
Salesforce and SL Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and SL Green
The main advantage of trading using opposite Salesforce and SL Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, SL Green 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 SL Green will offset losses from the drop in SL Green's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| SL Green vs. Mitsubishi UFJ Financial | SL Green vs. T Mobile | SL Green vs. G2D Investments | SL Green vs. Ameriprise Financial |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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