Correlation Between SALESFORCE INC and Manulife Financial
Can any of the company-specific risk be diversified away by investing in both SALESFORCE INC and Manulife Financial 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 Manulife Financial 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 Manulife Financial, you can compare the effects of market volatilities on SALESFORCE INC and Manulife Financial 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 Manulife Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and Manulife Financial.
Diversification Opportunities for SALESFORCE INC and Manulife Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SALESFORCE and Manulife is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and Manulife Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manulife Financial 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 Manulife Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manulife Financial has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and Manulife Financial go up and down completely randomly.
Pair Corralation between SALESFORCE INC and Manulife Financial
Assuming the 90 days trading horizon SALESFORCE INC is expected to generate 1.61 times less return on investment than Manulife Financial. In addition to that, SALESFORCE INC is 1.62 times more volatile than Manulife Financial. It trades about 0.05 of its total potential returns per unit of risk. Manulife Financial is currently generating about 0.13 per unit of volatility. If you would invest 1,784 in Manulife Financial on September 14, 2024 and sell it today you would earn a total of 1,185 from holding Manulife Financial or generate 66.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SALESFORCE INC CDR vs. Manulife Financial
Performance |
| Timeline |
| SALESFORCE INC CDR |
| Manulife Financial |
SALESFORCE INC and Manulife Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SALESFORCE INC and Manulife Financial
The main advantage of trading using opposite SALESFORCE INC and Manulife Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALESFORCE INC position performs unexpectedly, Manulife Financial 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 Manulife Financial will offset losses from the drop in Manulife Financial's long position.| SALESFORCE INC vs. HYDROFARM HLD GRP | SALESFORCE INC vs. Entravision Communications | SALESFORCE INC vs. Singapore Telecommunications Limited | SALESFORCE INC vs. Computer And Technologies |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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