Correlation Between Salesforce and Société Générale
Can any of the company-specific risk be diversified away by investing in both Salesforce and Société Générale 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 Société Générale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Socit Gnrale Socit, you can compare the effects of market volatilities on Salesforce and Société Générale 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 Société Générale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Société Générale.
Diversification Opportunities for Salesforce and Société Générale
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Société is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit 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 Société Générale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Salesforce i.e., Salesforce and Société Générale go up and down completely randomly.
Pair Corralation between Salesforce and Société Générale
Considering the 90-day investment horizon Salesforce is expected to generate 1.38 times more return on investment than Société Générale. However, Salesforce is 1.38 times more volatile than Socit Gnrale Socit. It trades about 0.28 of its potential returns per unit of risk. Socit Gnrale Socit is currently generating about -0.12 per unit of risk. If you would invest 29,137 in Salesforce on September 1, 2024 and sell it today you would earn a total of 3,862 from holding Salesforce or generate 13.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 91.3% |
| Values | Daily Returns |
Salesforce vs. Socit Gnrale Socit
Performance |
| Timeline |
| Salesforce |
| Socit Gnrale Socit |
Salesforce and Société Générale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Société Générale
The main advantage of trading using opposite Salesforce and Société Générale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Société Générale 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 Société Générale will offset losses from the drop in Société Générale's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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