Correlation Between Salesforce and White Mountains
Can any of the company-specific risk be diversified away by investing in both Salesforce and White Mountains 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 White Mountains into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and White Mountains Insurance, you can compare the effects of market volatilities on Salesforce and White Mountains 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 White Mountains. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and White Mountains.
Diversification Opportunities for Salesforce and White Mountains
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and White is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and White Mountains Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on White Mountains Insurance 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 White Mountains. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of White Mountains Insurance has no effect on the direction of Salesforce i.e., Salesforce and White Mountains go up and down completely randomly.
Pair Corralation between Salesforce and White Mountains
Considering the 90-day investment horizon Salesforce is expected to generate 1.56 times more return on investment than White Mountains. However, Salesforce is 1.56 times more volatile than White Mountains Insurance. It trades about 0.05 of its potential returns per unit of risk. White Mountains Insurance is currently generating about 0.07 per unit of risk. If you would invest 26,769 in Salesforce on November 9, 2024 and sell it today you would earn a total of 6,312 from holding Salesforce or generate 23.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. White Mountains Insurance
Performance |
| Timeline |
| Salesforce |
| White Mountains Insurance |
Salesforce and White Mountains Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and White Mountains
The main advantage of trading using opposite Salesforce and White Mountains positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, White Mountains 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 White Mountains will offset losses from the drop in White Mountains' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| White Mountains vs. NI Holdings | White Mountains vs. Donegal Group A | White Mountains vs. Donegal Group B | White Mountains vs. The Hanover Insurance |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |