Correlation Between Caseys General and Salesforce
Can any of the company-specific risk be diversified away by investing in both Caseys General and Salesforce 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 Caseys General and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and Salesforce, you can compare the effects of market volatilities on Caseys General and Salesforce 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 Caseys General with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and Salesforce.
Diversification Opportunities for Caseys General and Salesforce
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Caseys and Salesforce is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Caseys General 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 Caseys General Stores are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Caseys General i.e., Caseys General and Salesforce go up and down completely randomly.
Pair Corralation between Caseys General and Salesforce
Assuming the 90 days trading horizon Caseys General Stores is expected to generate 0.73 times more return on investment than Salesforce. However, Caseys General Stores is 1.37 times less risky than Salesforce. It trades about 0.11 of its potential returns per unit of risk. Salesforce is currently generating about 0.08 per unit of risk. If you would invest 28,878 in Caseys General Stores on September 20, 2024 and sell it today you would earn a total of 10,922 from holding Caseys General Stores or generate 37.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. Salesforce
Performance |
| Timeline |
| Caseys General Stores |
| Salesforce |
Caseys General and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and Salesforce
The main advantage of trading using opposite Caseys General and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc | Caseys General vs. Apple Inc |
| Salesforce vs. Superior Plus Corp | Salesforce vs. SIVERS SEMICONDUCTORS AB | Salesforce vs. Norsk Hydro ASA | Salesforce vs. Reliance Steel Aluminum |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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