Correlation Between SALESFORCE INC and China Coal
Can any of the company-specific risk be diversified away by investing in both SALESFORCE INC and China Coal 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 Coal 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 Coal Energy, you can compare the effects of market volatilities on SALESFORCE INC and China Coal 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 Coal. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and China Coal.
Diversification Opportunities for SALESFORCE INC and China Coal
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SALESFORCE and China is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and China Coal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Coal Energy 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 Coal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Coal Energy has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and China Coal go up and down completely randomly.
Pair Corralation between SALESFORCE INC and China Coal
Assuming the 90 days trading horizon SALESFORCE INC CDR is expected to generate 0.76 times more return on investment than China Coal. However, SALESFORCE INC CDR is 1.31 times less risky than China Coal. It trades about 0.09 of its potential returns per unit of risk. China Coal Energy is currently generating about 0.06 per unit of risk. If you would invest 732.00 in SALESFORCE INC CDR on September 2, 2024 and sell it today you would earn a total of 1,038 from holding SALESFORCE INC CDR or generate 141.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALESFORCE INC CDR vs. China Coal Energy
Performance |
| Timeline |
| SALESFORCE INC CDR |
| China Coal Energy |
SALESFORCE INC and China Coal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALESFORCE INC and China Coal
The main advantage of trading using opposite SALESFORCE INC and China Coal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALESFORCE INC position performs unexpectedly, China Coal 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 Coal will offset losses from the drop in China Coal's long position.| SALESFORCE INC vs. Superior Plus Corp | SALESFORCE INC vs. NMI Holdings | SALESFORCE INC vs. Origin Agritech | SALESFORCE INC vs. SIVERS SEMICONDUCTORS AB |
| China Coal vs. Tradeweb Markets | China Coal vs. AUTO TRADER ADR | China Coal vs. Infrastrutture Wireless Italiane | China Coal vs. SALESFORCE INC CDR |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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