Correlation Between Salesforce and State Street
Can any of the company-specific risk be diversified away by investing in both Salesforce and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and State Street Master, you can compare the effects of market volatilities on Salesforce and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and State Street.
Diversification Opportunities for Salesforce and State Street
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and State is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and State Street Master in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Master 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Master has no effect on the direction of Salesforce i.e., Salesforce and State Street go up and down completely randomly.
Pair Corralation between Salesforce and State Street
Considering the 90-day investment horizon Salesforce is expected to generate 3.43 times more return on investment than State Street. However, Salesforce is 3.43 times more volatile than State Street Master. It trades about 0.1 of its potential returns per unit of risk. State Street Master is currently generating about 0.03 per unit of risk. If you would invest 13,053 in Salesforce on August 30, 2024 and sell it today you would earn a total of 19,948 from holding Salesforce or generate 152.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Salesforce vs. State Street Master
Performance |
| Timeline |
| Salesforce |
| State Street Master |
Salesforce and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and State Street
The main advantage of trading using opposite Salesforce and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| State Street vs. Calvert High Yield | State Street vs. American Century High | State Street vs. Ppm High Yield | State Street vs. Gmo High Yield |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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