Correlation Between Salesforce and SATO Technologies
Can any of the company-specific risk be diversified away by investing in both Salesforce and SATO Technologies 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 SATO Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and SATO Technologies Corp, you can compare the effects of market volatilities on Salesforce and SATO Technologies 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 SATO Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and SATO Technologies.
Diversification Opportunities for Salesforce and SATO Technologies
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and SATO is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SATO Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SATO Technologies 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 SATO Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SATO Technologies Corp has no effect on the direction of Salesforce i.e., Salesforce and SATO Technologies go up and down completely randomly.
Pair Corralation between Salesforce and SATO Technologies
Considering the 90-day investment horizon Salesforce is expected to generate 0.26 times more return on investment than SATO Technologies. However, Salesforce is 3.82 times less risky than SATO Technologies. It trades about 0.25 of its potential returns per unit of risk. SATO Technologies Corp is currently generating about -0.03 per unit of risk. If you would invest 29,472 in Salesforce on September 2, 2024 and sell it today you would earn a total of 3,527 from holding Salesforce or generate 11.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. SATO Technologies Corp
Performance |
| Timeline |
| Salesforce |
| SATO Technologies Corp |
Salesforce and SATO Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and SATO Technologies
The main advantage of trading using opposite Salesforce and SATO Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, SATO Technologies 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 SATO Technologies will offset losses from the drop in SATO Technologies' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| SATO Technologies vs. TGS Esports | SATO Technologies vs. Quorum Information Technologies | SATO Technologies vs. Altair Resources | SATO Technologies vs. Doman Building Materials |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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