Correlation Between Salesforce and CrowdStrike Holdings
Can any of the company-specific risk be diversified away by investing in both Salesforce and CrowdStrike Holdings 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 CrowdStrike Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and CrowdStrike Holdings, you can compare the effects of market volatilities on Salesforce and CrowdStrike Holdings 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 CrowdStrike Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and CrowdStrike Holdings.
Diversification Opportunities for Salesforce and CrowdStrike Holdings
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Salesforce and CrowdStrike is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CrowdStrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrowdStrike Holdings 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 CrowdStrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrowdStrike Holdings has no effect on the direction of Salesforce i.e., Salesforce and CrowdStrike Holdings go up and down completely randomly.
Pair Corralation between Salesforce and CrowdStrike Holdings
Assuming the 90 days trading horizon Salesforce is expected to generate 1.21 times less return on investment than CrowdStrike Holdings. But when comparing it to its historical volatility, Salesforce is 1.35 times less risky than CrowdStrike Holdings. It trades about 0.05 of its potential returns per unit of risk. CrowdStrike Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 27,600 in CrowdStrike Holdings on October 20, 2024 and sell it today you would earn a total of 7,575 from holding CrowdStrike Holdings or generate 27.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. CrowdStrike Holdings
Performance |
| Timeline |
| Salesforce |
| CrowdStrike Holdings |
Salesforce and CrowdStrike Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and CrowdStrike Holdings
The main advantage of trading using opposite Salesforce and CrowdStrike Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, CrowdStrike Holdings 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 CrowdStrike Holdings will offset losses from the drop in CrowdStrike Holdings' long position.| Salesforce vs. Globex Mining Enterprises | Salesforce vs. MAG SILVER | Salesforce vs. Eurasia Mining Plc | Salesforce vs. 24SEVENOFFICE GROUP AB |
| CrowdStrike Holdings vs. BII Railway Transportation | CrowdStrike Holdings vs. Stag Industrial | CrowdStrike Holdings vs. TRAINLINE PLC LS | CrowdStrike Holdings vs. Perseus Mining Limited |
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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