Correlation Between Salesforce and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Salesforce and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Samsung Electronics Co, you can compare the effects of market volatilities on Salesforce and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Samsung Electronics.
Diversification Opportunities for Salesforce and Samsung Electronics
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Samsung is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Salesforce i.e., Salesforce and Samsung Electronics go up and down completely randomly.
Pair Corralation between Salesforce and Samsung Electronics
Considering the 90-day investment horizon Salesforce is expected to generate 0.79 times more return on investment than Samsung Electronics. However, Salesforce is 1.26 times less risky than Samsung Electronics. It trades about 0.23 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.04 per unit of risk. If you would invest 29,640 in Salesforce on August 31, 2024 and sell it today you would earn a total of 3,361 from holding Salesforce or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Samsung Electronics Co
Performance |
| Timeline |
| Salesforce |
| Samsung Electronics |
Salesforce and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Samsung Electronics
The main advantage of trading using opposite Salesforce and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Samsung Electronics vs. Fukuyama Transporting Co | Samsung Electronics vs. KAUFMAN ET BROAD | Samsung Electronics vs. The Hanover Insurance | Samsung Electronics vs. Goosehead Insurance |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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