Correlation Between Salesforce and WESCO International
Can any of the company-specific risk be diversified away by investing in both Salesforce and WESCO International 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 WESCO International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and WESCO International, you can compare the effects of market volatilities on Salesforce and WESCO International 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 WESCO International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and WESCO International.
Diversification Opportunities for Salesforce and WESCO International
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Salesforce and WESCO is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and WESCO International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WESCO International 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 WESCO International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WESCO International has no effect on the direction of Salesforce i.e., Salesforce and WESCO International go up and down completely randomly.
Pair Corralation between Salesforce and WESCO International
Assuming the 90 days trading horizon Salesforce is expected to generate 0.85 times more return on investment than WESCO International. However, Salesforce is 1.17 times less risky than WESCO International. It trades about 0.07 of its potential returns per unit of risk. WESCO International is currently generating about 0.02 per unit of risk. If you would invest 32,130 in Salesforce on November 7, 2024 and sell it today you would earn a total of 825.00 from holding Salesforce or generate 2.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Salesforce vs. WESCO International
Performance |
| Timeline |
| Salesforce |
| WESCO International |
Salesforce and WESCO International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and WESCO International
The main advantage of trading using opposite Salesforce and WESCO International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, WESCO International 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 WESCO International will offset losses from the drop in WESCO International's long position.| Salesforce vs. Sumitomo Rubber Industries | Salesforce vs. TITANIUM TRANSPORTGROUP | Salesforce vs. Compagnie Plastic Omnium | Salesforce vs. COPLAND ROAD CAPITAL |
| WESCO International vs. RATIONAL Aktiengesellschaft | WESCO International vs. WW Grainger | WESCO International vs. Fastenal Company | WESCO International vs. Watsco Inc |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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