Correlation Between Salesforce and APPLE

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Can any of the company-specific risk be diversified away by investing in both Salesforce and APPLE 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 APPLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and APPLE INC 275, you can compare the effects of market volatilities on Salesforce and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and APPLE.

Diversification Opportunities for Salesforce and APPLE

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Salesforce and APPLE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and APPLE INC 275 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE INC 275 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC 275 has no effect on the direction of Salesforce i.e., Salesforce and APPLE go up and down completely randomly.

Pair Corralation between Salesforce and APPLE

Considering the 90-day investment horizon Salesforce is expected to generate 7.78 times more return on investment than APPLE. However, Salesforce is 7.78 times more volatile than APPLE INC 275. It trades about 0.08 of its potential returns per unit of risk. APPLE INC 275 is currently generating about 0.02 per unit of risk. If you would invest  17,013  in Salesforce on November 2, 2024 and sell it today you would earn a total of  18,387  from holding Salesforce or generate 108.08% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy97.97%
ValuesDaily Returns

Salesforce  vs.  APPLE INC 275

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
APPLE INC 275 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days APPLE INC 275 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, APPLE is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Salesforce and APPLE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and APPLE

The main advantage of trading using opposite Salesforce and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.
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The idea behind Salesforce and APPLE INC 275 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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