Correlation Between Salesforce and XBiotech
Can any of the company-specific risk be diversified away by investing in both Salesforce and XBiotech 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 XBiotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and XBiotech, you can compare the effects of market volatilities on Salesforce and XBiotech 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 XBiotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and XBiotech.
Diversification Opportunities for Salesforce and XBiotech
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and XBiotech is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and XBiotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XBiotech 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 XBiotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XBiotech has no effect on the direction of Salesforce i.e., Salesforce and XBiotech go up and down completely randomly.
Pair Corralation between Salesforce and XBiotech
Considering the 90-day investment horizon Salesforce is expected to generate 0.14 times more return on investment than XBiotech. However, Salesforce is 6.91 times less risky than XBiotech. It trades about -0.15 of its potential returns per unit of risk. XBiotech is currently generating about -0.27 per unit of risk. If you would invest 33,623 in Salesforce on October 20, 2024 and sell it today you would lose (1,167) from holding Salesforce or give up 3.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. XBiotech
Performance |
| Timeline |
| Salesforce |
| XBiotech |
Salesforce and XBiotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and XBiotech
The main advantage of trading using opposite Salesforce and XBiotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, XBiotech 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 XBiotech will offset losses from the drop in XBiotech's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| XBiotech vs. Generation Bio Co | XBiotech vs. Kronos Bio | XBiotech vs. Erasca Inc | XBiotech vs. C4 Therapeutics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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