Correlation Between SALESFORCE INC and China Eastern
Can any of the company-specific risk be diversified away by investing in both SALESFORCE INC and China Eastern 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 INC and China Eastern into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALESFORCE INC CDR and China Eastern Airlines, you can compare the effects of market volatilities on SALESFORCE INC and China Eastern 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 INC with a short position of China Eastern. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and China Eastern.
Diversification Opportunities for SALESFORCE INC and China Eastern
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SALESFORCE and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and China Eastern Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Eastern Airlines and SALESFORCE INC 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 INC CDR are associated (or correlated) with China Eastern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Eastern Airlines has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and China Eastern go up and down completely randomly.
Pair Corralation between SALESFORCE INC and China Eastern
Assuming the 90 days trading horizon SALESFORCE INC CDR is expected to generate 0.84 times more return on investment than China Eastern. However, SALESFORCE INC CDR is 1.19 times less risky than China Eastern. It trades about -0.11 of its potential returns per unit of risk. China Eastern Airlines is currently generating about -0.21 per unit of risk. If you would invest 1,847 in SALESFORCE INC CDR on October 11, 2024 and sell it today you would lose (77.00) from holding SALESFORCE INC CDR or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALESFORCE INC CDR vs. China Eastern Airlines
Performance |
| Timeline |
| SALESFORCE INC CDR |
| China Eastern Airlines |
SALESFORCE INC and China Eastern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALESFORCE INC and China Eastern
The main advantage of trading using opposite SALESFORCE INC and China Eastern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALESFORCE INC position performs unexpectedly, China Eastern 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 China Eastern will offset losses from the drop in China Eastern's long position.| SALESFORCE INC vs. Tower Semiconductor | SALESFORCE INC vs. Heidelberg Materials AG | SALESFORCE INC vs. Applied Materials | SALESFORCE INC vs. Goodyear Tire Rubber |
| China Eastern vs. GREENX METALS LTD | China Eastern vs. GALENA MINING LTD | China Eastern vs. Calibre Mining Corp | China Eastern vs. Astral Foods 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |