Correlation Between Salesforce and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Salesforce and KRISPY KREME 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 KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and KRISPY KREME DL 01, you can compare the effects of market volatilities on Salesforce and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and KRISPY KREME.
Diversification Opportunities for Salesforce and KRISPY KREME
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Salesforce and KRISPY is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of Salesforce i.e., Salesforce and KRISPY KREME go up and down completely randomly.
Pair Corralation between Salesforce and KRISPY KREME
Assuming the 90 days trading horizon Salesforce is expected to generate 0.68 times more return on investment than KRISPY KREME. However, Salesforce is 1.46 times less risky than KRISPY KREME. It trades about 0.07 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about -0.01 per unit of risk. If you would invest 19,327 in Salesforce on August 31, 2024 and sell it today you would earn a total of 12,078 from holding Salesforce or generate 62.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Salesforce vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Salesforce |
| KRISPY KREME DL |
Salesforce and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and KRISPY KREME
The main advantage of trading using opposite Salesforce and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| Salesforce vs. SAP SE | Salesforce vs. Superior Plus Corp | Salesforce vs. NMI Holdings | Salesforce vs. Origin Agritech |
| KRISPY KREME vs. Highlight Communications AG | KRISPY KREME vs. Playtech plc | KRISPY KREME vs. PLAYSTUDIOS A DL 0001 | KRISPY KREME vs. LG Display Co |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |