Correlation Between Salesforce and Sonim Technologies
Can any of the company-specific risk be diversified away by investing in both Salesforce and Sonim 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 Sonim Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Sonim Technologies, you can compare the effects of market volatilities on Salesforce and Sonim 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 Sonim Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Sonim Technologies.
Diversification Opportunities for Salesforce and Sonim Technologies
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Sonim is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Sonim Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonim Technologies 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 Sonim Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonim Technologies has no effect on the direction of Salesforce i.e., Salesforce and Sonim Technologies go up and down completely randomly.
Pair Corralation between Salesforce and Sonim Technologies
Considering the 90-day investment horizon Salesforce is expected to generate 0.41 times more return on investment than Sonim Technologies. However, Salesforce is 2.44 times less risky than Sonim Technologies. It trades about 0.09 of its potential returns per unit of risk. Sonim Technologies is currently generating about -0.02 per unit of risk. If you would invest 20,650 in Salesforce on September 1, 2024 and sell it today you would earn a total of 12,349 from holding Salesforce or generate 59.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Sonim Technologies
Performance |
| Timeline |
| Salesforce |
| Sonim Technologies |
Salesforce and Sonim Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Sonim Technologies
The main advantage of trading using opposite Salesforce and Sonim Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Sonim 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 Sonim Technologies will offset losses from the drop in Sonim Technologies' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| Sonim Technologies vs. Rigetti Computing | Sonim Technologies vs. D Wave Quantum | Sonim Technologies vs. IONQ Inc | Sonim Technologies vs. Desktop Metal |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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