Correlation Between Salesforce and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both Salesforce and SPARTAN STORES 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 SPARTAN STORES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and SPARTAN STORES, you can compare the effects of market volatilities on Salesforce and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and SPARTAN STORES.
Diversification Opportunities for Salesforce and SPARTAN STORES
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and SPARTAN is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of Salesforce i.e., Salesforce and SPARTAN STORES go up and down completely randomly.
Pair Corralation between Salesforce and SPARTAN STORES
Assuming the 90 days trading horizon Salesforce is expected to generate 0.98 times more return on investment than SPARTAN STORES. However, Salesforce is 1.02 times less risky than SPARTAN STORES. It trades about 0.14 of its potential returns per unit of risk. SPARTAN STORES is currently generating about 0.02 per unit of risk. If you would invest 21,242 in Salesforce on October 13, 2024 and sell it today you would earn a total of 9,818 from holding Salesforce or generate 46.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. SPARTAN STORES
Performance |
| Timeline |
| Salesforce |
| SPARTAN STORES |
Salesforce and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and SPARTAN STORES
The main advantage of trading using opposite Salesforce and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| Salesforce vs. Ebro Foods SA | Salesforce vs. Cal Maine Foods | Salesforce vs. JD SPORTS FASH | Salesforce vs. ePlay Digital |
| SPARTAN STORES vs. Columbia Sportswear | SPARTAN STORES vs. WIMFARM SA EO | SPARTAN STORES vs. JD SPORTS FASH | SPARTAN STORES vs. Hitachi Construction Machinery |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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