Correlation Between Salesforce and Westhaven Ventures

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

Diversification Opportunities for Salesforce and Westhaven Ventures

SalesforceWesthavenDiversified AwaySalesforceWesthavenDiversified Away100%
-0.4
  Correlation Coefficient

Very good diversification

The 3 months correlation between Salesforce and Westhaven is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Westhaven Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westhaven Ventures 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 Westhaven Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westhaven Ventures has no effect on the direction of Salesforce i.e., Salesforce and Westhaven Ventures go up and down completely randomly.

Pair Corralation between Salesforce and Westhaven Ventures

Considering the 90-day investment horizon Salesforce is expected to under-perform the Westhaven Ventures. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.97 times less risky than Westhaven Ventures. The stock trades about -0.16 of its potential returns per unit of risk. The Westhaven Ventures is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  12.00  in Westhaven Ventures on November 25, 2024 and sell it today you would earn a total of  2.00  from holding Westhaven Ventures or generate 16.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  Westhaven Ventures

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-10010
JavaScript chart by amCharts 3.21.15CRM WHN
       Timeline  
Salesforce 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb310320330340350360
Westhaven Ventures 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Westhaven Ventures are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Westhaven Ventures showed solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.090.10.110.120.130.140.150.16

Salesforce and Westhaven Ventures Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.53-2.65-1.76-0.870.00.861.712.573.42 0.010.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15CRM WHN
       Returns  

Pair Trading with Salesforce and Westhaven Ventures

The main advantage of trading using opposite Salesforce and Westhaven Ventures positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Westhaven Ventures 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 Westhaven Ventures will offset losses from the drop in Westhaven Ventures' long position.
The idea behind Salesforce and Westhaven Ventures 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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