Correlation Between Salesforce and Yirendai
Can any of the company-specific risk be diversified away by investing in both Salesforce and Yirendai 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 Yirendai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Yirendai, you can compare the effects of market volatilities on Salesforce and Yirendai 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 Yirendai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Yirendai.
Diversification Opportunities for Salesforce and Yirendai
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Yirendai is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Yirendai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yirendai 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 Yirendai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yirendai has no effect on the direction of Salesforce i.e., Salesforce and Yirendai go up and down completely randomly.
Pair Corralation between Salesforce and Yirendai
Considering the 90-day investment horizon Salesforce is expected to generate 0.4 times more return on investment than Yirendai. However, Salesforce is 2.49 times less risky than Yirendai. It trades about 0.36 of its potential returns per unit of risk. Yirendai is currently generating about -0.16 per unit of risk. If you would invest 29,377 in Salesforce on August 27, 2024 and sell it today you would earn a total of 4,825 from holding Salesforce or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Yirendai
Performance |
| Timeline |
| Salesforce |
| Yirendai |
Salesforce and Yirendai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Yirendai
The main advantage of trading using opposite Salesforce and Yirendai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Yirendai 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 Yirendai will offset losses from the drop in Yirendai's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Yirendai vs. Lexinfintech Holdings | Yirendai vs. FinVolution Group | Yirendai vs. 360 Finance | Yirendai vs. Navient Corp |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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