Correlation Between Salesforce and YIT Oyj
Can any of the company-specific risk be diversified away by investing in both Salesforce and YIT Oyj 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 YIT Oyj into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and YIT Oyj, you can compare the effects of market volatilities on Salesforce and YIT Oyj 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 YIT Oyj. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and YIT Oyj.
Diversification Opportunities for Salesforce and YIT Oyj
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and YIT is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and YIT Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YIT Oyj 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 YIT Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YIT Oyj has no effect on the direction of Salesforce i.e., Salesforce and YIT Oyj go up and down completely randomly.
Pair Corralation between Salesforce and YIT Oyj
Considering the 90-day investment horizon Salesforce is expected to generate 0.7 times more return on investment than YIT Oyj. However, Salesforce is 1.43 times less risky than YIT Oyj. It trades about 0.28 of its potential returns per unit of risk. YIT Oyj is currently generating about -0.04 per unit of risk. If you would invest 25,661 in Salesforce on August 29, 2024 and sell it today you would earn a total of 8,657 from holding Salesforce or generate 33.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Salesforce vs. YIT Oyj
Performance |
| Timeline |
| Salesforce |
| YIT Oyj |
Salesforce and YIT Oyj Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and YIT Oyj
The main advantage of trading using opposite Salesforce and YIT Oyj positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, YIT Oyj 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 YIT Oyj will offset losses from the drop in YIT Oyj's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| YIT Oyj vs. Outokumpu Oyj | YIT Oyj vs. Wartsila Oyj Abp | YIT Oyj vs. Telia Company AB | YIT Oyj vs. Konecranes Plc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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