Correlation Between Salesforce and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Salesforce and Sumitomo Mitsui 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 Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Sumitomo Mitsui Financial, you can compare the effects of market volatilities on Salesforce and Sumitomo Mitsui 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 Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Sumitomo Mitsui.
Diversification Opportunities for Salesforce and Sumitomo Mitsui
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Sumitomo is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Sumitomo Mitsui Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Financial 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 Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Financial has no effect on the direction of Salesforce i.e., Salesforce and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Salesforce and Sumitomo Mitsui
Considering the 90-day investment horizon Salesforce is expected to generate 1.07 times more return on investment than Sumitomo Mitsui. However, Salesforce is 1.07 times more volatile than Sumitomo Mitsui Financial. It trades about 0.1 of its potential returns per unit of risk. Sumitomo Mitsui Financial is currently generating about 0.1 per unit of risk. If you would invest 13,268 in Salesforce on August 27, 2024 and sell it today you would earn a total of 20,934 from holding Salesforce or generate 157.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Sumitomo Mitsui Financial
Performance |
| Timeline |
| Salesforce |
| Sumitomo Mitsui Financial |
Salesforce and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Sumitomo Mitsui
The main advantage of trading using opposite Salesforce and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Sumitomo Mitsui vs. Barclays PLC ADR | Sumitomo Mitsui vs. Mitsubishi UFJ Financial | Sumitomo Mitsui vs. ING Group NV | Sumitomo Mitsui vs. HSBC Holdings PLC |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |