Correlation Between Salesforce and HEALTHCARE

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

Diversification Opportunities for Salesforce and HEALTHCARE

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Salesforce and HEALTHCARE is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and HEALTHCARE TRUST OF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TRUST 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 HEALTHCARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TRUST has no effect on the direction of Salesforce i.e., Salesforce and HEALTHCARE go up and down completely randomly.

Pair Corralation between Salesforce and HEALTHCARE

Considering the 90-day investment horizon Salesforce is expected to generate 0.09 times more return on investment than HEALTHCARE. However, Salesforce is 10.81 times less risky than HEALTHCARE. It trades about 0.05 of its potential returns per unit of risk. HEALTHCARE TRUST OF is currently generating about -0.22 per unit of risk. If you would invest  32,493  in Salesforce on November 8, 2024 and sell it today you would earn a total of  588.00  from holding Salesforce or generate 1.81% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Salesforce  vs.  HEALTHCARE TRUST OF

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
HEALTHCARE TRUST 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HEALTHCARE TRUST OF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Bond's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for HEALTHCARE TRUST OF investors.

Salesforce and HEALTHCARE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and HEALTHCARE

The main advantage of trading using opposite Salesforce and HEALTHCARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, HEALTHCARE 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 HEALTHCARE will offset losses from the drop in HEALTHCARE's long position.
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The idea behind Salesforce and HEALTHCARE TRUST OF 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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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

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