Correlation Between Salesforce and TravelCenters
Can any of the company-specific risk be diversified away by investing in both Salesforce and TravelCenters 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 TravelCenters into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and TravelCenters Of America, you can compare the effects of market volatilities on Salesforce and TravelCenters 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 TravelCenters. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and TravelCenters.
Diversification Opportunities for Salesforce and TravelCenters
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and TravelCenters is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and TravelCenters Of America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TravelCenters Of America 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 TravelCenters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TravelCenters Of America has no effect on the direction of Salesforce i.e., Salesforce and TravelCenters go up and down completely randomly.
Pair Corralation between Salesforce and TravelCenters
If you would invest 23,588 in Salesforce on September 1, 2024 and sell it today you would earn a total of 9,411 from holding Salesforce or generate 39.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Salesforce vs. TravelCenters Of America
Performance |
| Timeline |
| Salesforce |
| TravelCenters Of America |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and TravelCenters Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and TravelCenters
The main advantage of trading using opposite Salesforce and TravelCenters positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, TravelCenters 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 TravelCenters will offset losses from the drop in TravelCenters' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| TravelCenters vs. B Riley Financial | TravelCenters vs. Sotherly Hotels Series | TravelCenters vs. B Riley Financial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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