Correlation Between Salesforce and Thai Steel
Can any of the company-specific risk be diversified away by investing in both Salesforce and Thai Steel 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 Thai Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Thai Steel Cable, you can compare the effects of market volatilities on Salesforce and Thai Steel 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 Thai Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Thai Steel.
Diversification Opportunities for Salesforce and Thai Steel
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Thai is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Thai Steel Cable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Steel Cable 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 Thai Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Steel Cable has no effect on the direction of Salesforce i.e., Salesforce and Thai Steel go up and down completely randomly.
Pair Corralation between Salesforce and Thai Steel
Considering the 90-day investment horizon Salesforce is expected to generate 25.87 times less return on investment than Thai Steel. But when comparing it to its historical volatility, Salesforce is 51.95 times less risky than Thai Steel. It trades about 0.16 of its potential returns per unit of risk. Thai Steel Cable is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,420 in Thai Steel Cable on September 1, 2024 and sell it today you would earn a total of 60.00 from holding Thai Steel Cable or generate 4.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Salesforce vs. Thai Steel Cable
Performance |
| Timeline |
| Salesforce |
| Thai Steel Cable |
Salesforce and Thai Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Thai Steel
The main advantage of trading using opposite Salesforce and Thai Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Thai Steel 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 Thai Steel will offset losses from the drop in Thai Steel's long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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