Correlation Between Salesforce and Straumann Holding
Can any of the company-specific risk be diversified away by investing in both Salesforce and Straumann Holding 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 Straumann Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Straumann Holding AG, you can compare the effects of market volatilities on Salesforce and Straumann Holding 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 Straumann Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Straumann Holding.
Diversification Opportunities for Salesforce and Straumann Holding
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Straumann is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Straumann Holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Straumann Holding 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 Straumann Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Straumann Holding has no effect on the direction of Salesforce i.e., Salesforce and Straumann Holding go up and down completely randomly.
Pair Corralation between Salesforce and Straumann Holding
Considering the 90-day investment horizon Salesforce is expected to generate 0.37 times more return on investment than Straumann Holding. However, Salesforce is 2.72 times less risky than Straumann Holding. It trades about 0.26 of its potential returns per unit of risk. Straumann Holding AG is currently generating about -0.03 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Straumann Holding AG
Performance |
| Timeline |
| Salesforce |
| Straumann Holding |
Salesforce and Straumann Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Straumann Holding
The main advantage of trading using opposite Salesforce and Straumann Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Straumann Holding 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 Straumann Holding will offset losses from the drop in Straumann Holding's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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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