Correlation Between Salesforce and VerifyMe
Can any of the company-specific risk be diversified away by investing in both Salesforce and VerifyMe 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 VerifyMe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and VerifyMe, you can compare the effects of market volatilities on Salesforce and VerifyMe 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 VerifyMe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and VerifyMe.
Diversification Opportunities for Salesforce and VerifyMe
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and VerifyMe is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and VerifyMe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VerifyMe 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 VerifyMe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VerifyMe has no effect on the direction of Salesforce i.e., Salesforce and VerifyMe go up and down completely randomly.
Pair Corralation between Salesforce and VerifyMe
Considering the 90-day investment horizon Salesforce is expected to generate 8.46 times less return on investment than VerifyMe. But when comparing it to its historical volatility, Salesforce is 12.77 times less risky than VerifyMe. It trades about 0.1 of its potential returns per unit of risk. VerifyMe is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 160.00 in VerifyMe on November 5, 2024 and sell it today you would lose (16.00) from holding VerifyMe or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. VerifyMe
Performance |
| Timeline |
| Salesforce |
| VerifyMe |
Salesforce and VerifyMe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and VerifyMe
The main advantage of trading using opposite Salesforce and VerifyMe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, VerifyMe 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 VerifyMe will offset losses from the drop in VerifyMe's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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