Correlation Between Salesforce and Wynn Macau

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

Diversification Opportunities for Salesforce and Wynn Macau

0.34
  Correlation Coefficient

Weak diversification

The 3 months correlation between Salesforce and Wynn is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Wynn Macau in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wynn Macau 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 Wynn Macau. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wynn Macau has no effect on the direction of Salesforce i.e., Salesforce and Wynn Macau go up and down completely randomly.

Pair Corralation between Salesforce and Wynn Macau

Considering the 90-day investment horizon Salesforce is expected to generate 0.97 times more return on investment than Wynn Macau. However, Salesforce is 1.03 times less risky than Wynn Macau. It trades about 0.35 of its potential returns per unit of risk. Wynn Macau is currently generating about -0.27 per unit of risk. If you would invest  29,377  in Salesforce on August 29, 2024 and sell it today you would earn a total of  4,941  from holding Salesforce or generate 16.82% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  Wynn Macau

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
Wynn Macau 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Wynn Macau are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady primary indicators, Wynn Macau may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Salesforce and Wynn Macau Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Wynn Macau

The main advantage of trading using opposite Salesforce and Wynn Macau positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Wynn Macau 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 Wynn Macau will offset losses from the drop in Wynn Macau's long position.
The idea behind Salesforce and Wynn Macau 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.
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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