Correlation Between Salesforce and XFit Brands
Can any of the company-specific risk be diversified away by investing in both Salesforce and XFit Brands 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 XFit Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and XFit Brands, you can compare the effects of market volatilities on Salesforce and XFit Brands 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 XFit Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and XFit Brands.
Diversification Opportunities for Salesforce and XFit Brands
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and XFit is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and XFit Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XFit Brands 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 XFit Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XFit Brands has no effect on the direction of Salesforce i.e., Salesforce and XFit Brands go up and down completely randomly.
Pair Corralation between Salesforce and XFit Brands
Considering the 90-day investment horizon Salesforce is expected to generate 8.8 times less return on investment than XFit Brands. But when comparing it to its historical volatility, Salesforce is 13.11 times less risky than XFit Brands. It trades about 0.07 of its potential returns per unit of risk. XFit Brands is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 0.06 in XFit Brands on September 1, 2024 and sell it today you would earn a total of 0.02 from holding XFit Brands or generate 33.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Salesforce vs. XFit Brands
Performance |
| Timeline |
| Salesforce |
| XFit Brands |
Salesforce and XFit Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and XFit Brands
The main advantage of trading using opposite Salesforce and XFit Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, XFit Brands 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 XFit Brands will offset losses from the drop in XFit Brands' long position.| Salesforce vs. Ke Holdings | Salesforce vs. nCino Inc | Salesforce vs. Kingsoft Cloud Holdings | Salesforce vs. Jfrog |
| XFit Brands vs. Sonos Inc | XFit Brands vs. Playtech plc | XFit Brands vs. Zhihu Inc ADR | XFit Brands vs. Planet Fitness |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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