Correlation Between Guangdong Investment and SALESFORCE INC
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment and SALESFORCE INC 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 Guangdong Investment and SALESFORCE INC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and SALESFORCE INC CDR, you can compare the effects of market volatilities on Guangdong Investment and SALESFORCE INC 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 Guangdong Investment with a short position of SALESFORCE INC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and SALESFORCE INC.
Diversification Opportunities for Guangdong Investment and SALESFORCE INC
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Guangdong and SALESFORCE is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and SALESFORCE INC CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALESFORCE INC CDR and Guangdong Investment 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 Guangdong Investment Limited are associated (or correlated) with SALESFORCE INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALESFORCE INC CDR has no effect on the direction of Guangdong Investment i.e., Guangdong Investment and SALESFORCE INC go up and down completely randomly.
Pair Corralation between Guangdong Investment and SALESFORCE INC
Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 1.07 times more return on investment than SALESFORCE INC. However, Guangdong Investment is 1.07 times more volatile than SALESFORCE INC CDR. It trades about 0.2 of its potential returns per unit of risk. SALESFORCE INC CDR is currently generating about -0.02 per unit of risk. If you would invest 55.00 in Guangdong Investment Limited on October 28, 2024 and sell it today you would earn a total of 17.00 from holding Guangdong Investment Limited or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. SALESFORCE INC CDR
Performance |
| Timeline |
| Guangdong Investment |
| SALESFORCE INC CDR |
Guangdong Investment and SALESFORCE INC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and SALESFORCE INC
The main advantage of trading using opposite Guangdong Investment and SALESFORCE INC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment position performs unexpectedly, SALESFORCE INC 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 SALESFORCE INC will offset losses from the drop in SALESFORCE INC's long position.| Guangdong Investment vs. LOANDEPOT INC A | Guangdong Investment vs. Sixt Leasing SE | Guangdong Investment vs. Commercial Vehicle Group | Guangdong Investment vs. CHINA TONTINE WINES |
| SALESFORCE INC vs. Focus Home Interactive | SALESFORCE INC vs. The Japan Steel | SALESFORCE INC vs. United States Steel | SALESFORCE INC vs. Nippon Steel |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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