Correlation Between Salesforce and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Salesforce and Telenor ASA 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 Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Telenor ASA ADR, you can compare the effects of market volatilities on Salesforce and Telenor ASA 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 Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Telenor ASA.
Diversification Opportunities for Salesforce and Telenor ASA
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Telenor is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Telenor ASA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA ADR 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 Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA ADR has no effect on the direction of Salesforce i.e., Salesforce and Telenor ASA go up and down completely randomly.
Pair Corralation between Salesforce and Telenor ASA
Considering the 90-day investment horizon Salesforce is expected to generate 1.49 times more return on investment than Telenor ASA. However, Salesforce is 1.49 times more volatile than Telenor ASA ADR. It trades about 0.2 of its potential returns per unit of risk. Telenor ASA ADR is currently generating about 0.04 per unit of risk. If you would invest 21,733 in Salesforce on August 28, 2024 and sell it today you would earn a total of 12,178 from holding Salesforce or generate 56.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Salesforce vs. Telenor ASA ADR
Performance |
| Timeline |
| Salesforce |
| Telenor ASA ADR |
Salesforce and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Telenor ASA
The main advantage of trading using opposite Salesforce and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Telenor ASA vs. HUMANA INC | Telenor ASA vs. SCOR PK | Telenor ASA vs. Aquagold International | Telenor ASA vs. Barloworld Ltd ADR |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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