Correlation Between Salesforce and Workday
Can any of the company-specific risk be diversified away by investing in both Salesforce and Workday 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 Workday into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Workday, you can compare the effects of market volatilities on Salesforce and Workday 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 Workday. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Workday.
Diversification Opportunities for Salesforce and Workday
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and Workday is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Workday in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Workday 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 Workday. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Workday has no effect on the direction of Salesforce i.e., Salesforce and Workday go up and down completely randomly.
Pair Corralation between Salesforce and Workday
Considering the 90-day investment horizon Salesforce is expected to generate 0.96 times more return on investment than Workday. However, Salesforce is 1.04 times less risky than Workday. It trades about 0.34 of its potential returns per unit of risk. Workday is currently generating about 0.18 per unit of risk. If you would invest 28,833 in Salesforce on August 23, 2024 and sell it today you would earn a total of 4,745 from holding Salesforce or generate 16.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Workday
Performance |
| Timeline |
| Salesforce |
| Workday |
Salesforce and Workday Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Workday
The main advantage of trading using opposite Salesforce and Workday positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Workday 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 Workday will offset losses from the drop in Workday's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Workday vs. Intuit Inc | Workday vs. Zoom Video Communications | Workday vs. ServiceNow | Workday vs. Snowflake |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Stocks Directory Find actively traded stocks across global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Commodity Directory Find actively traded commodities issued by global exchanges |