Correlation Between Salesforce and SalMar ASA
Can any of the company-specific risk be diversified away by investing in both Salesforce and SalMar ASA 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 SalMar ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and SalMar ASA, you can compare the effects of market volatilities on Salesforce and SalMar ASA 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 SalMar ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and SalMar ASA.
Diversification Opportunities for Salesforce and SalMar ASA
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and SalMar is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SalMar ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalMar ASA 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 SalMar ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SalMar ASA has no effect on the direction of Salesforce i.e., Salesforce and SalMar ASA go up and down completely randomly.
Pair Corralation between Salesforce and SalMar ASA
Assuming the 90 days trading horizon Salesforce is expected to generate 1.56 times more return on investment than SalMar ASA. However, Salesforce is 1.56 times more volatile than SalMar ASA. It trades about 0.05 of its potential returns per unit of risk. SalMar ASA is currently generating about -0.34 per unit of risk. If you would invest 32,521 in Salesforce on September 24, 2024 and sell it today you would earn a total of 609.00 from holding Salesforce or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. SalMar ASA
Performance |
| Timeline |
| Salesforce |
| SalMar ASA |
Salesforce and SalMar ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and SalMar ASA
The main advantage of trading using opposite Salesforce and SalMar ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, SalMar ASA 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 SalMar ASA will offset losses from the drop in SalMar ASA's long position.| Salesforce vs. SAP SE | Salesforce vs. Uber Technologies | Salesforce vs. Nemetschek AG ON | Salesforce vs. Workiva |
| SalMar ASA vs. Salesforce | SalMar ASA vs. Insteel Industries | SalMar ASA vs. Lamar Advertising | SalMar ASA vs. MUTUIONLINE |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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