Correlation Between Salesforce and Worthington Industries
Can any of the company-specific risk be diversified away by investing in both Salesforce and Worthington Industries 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 Worthington Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Worthington Industries, you can compare the effects of market volatilities on Salesforce and Worthington Industries 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 Worthington Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Worthington Industries.
Diversification Opportunities for Salesforce and Worthington Industries
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Worthington is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Worthington Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worthington Industries 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 Worthington Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worthington Industries has no effect on the direction of Salesforce i.e., Salesforce and Worthington Industries go up and down completely randomly.
Pair Corralation between Salesforce and Worthington Industries
Considering the 90-day investment horizon Salesforce is expected to generate 0.73 times more return on investment than Worthington Industries. However, Salesforce is 1.36 times less risky than Worthington Industries. It trades about 0.36 of its potential returns per unit of risk. Worthington Industries is currently generating about 0.04 per unit of risk. If you would invest 29,377 in Salesforce on August 27, 2024 and sell it today you would earn a total of 4,825 from holding Salesforce or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Worthington Industries
Performance |
| Timeline |
| Salesforce |
| Worthington Industries |
Salesforce and Worthington Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Worthington Industries
The main advantage of trading using opposite Salesforce and Worthington Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Worthington Industries 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 Worthington Industries will offset losses from the drop in Worthington Industries' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Worthington Industries vs. Allegheny Technologies Incorporated | Worthington Industries vs. Haynes International | Worthington Industries vs. ESAB Corp | Worthington Industries vs. Insteel Industries |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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