Correlation Between Occidental Petroleum and Salesforce
Can any of the company-specific risk be diversified away by investing in both Occidental Petroleum and Salesforce 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 Occidental Petroleum and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Occidental Petroleum and Salesforce, you can compare the effects of market volatilities on Occidental Petroleum and Salesforce 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 Occidental Petroleum with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Occidental Petroleum and Salesforce.
Diversification Opportunities for Occidental Petroleum and Salesforce
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Occidental and Salesforce is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Occidental Petroleum and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Occidental Petroleum 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 Occidental Petroleum are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of Occidental Petroleum i.e., Occidental Petroleum and Salesforce go up and down completely randomly.
Pair Corralation between Occidental Petroleum and Salesforce
Assuming the 90 days horizon Occidental Petroleum is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Occidental Petroleum is 1.04 times less risky than Salesforce. The stock trades about -0.14 of its potential returns per unit of risk. The Salesforce is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 32,435 in Salesforce on November 3, 2024 and sell it today you would earn a total of 1,010 from holding Salesforce or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Occidental Petroleum vs. Salesforce
Performance |
| Timeline |
| Occidental Petroleum |
| Salesforce |
Occidental Petroleum and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Occidental Petroleum and Salesforce
The main advantage of trading using opposite Occidental Petroleum and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Occidental Petroleum position performs unexpectedly, Salesforce 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 will offset losses from the drop in Salesforce's long position.| Occidental Petroleum vs. Aya Gold Silver | Occidental Petroleum vs. Molina Healthcare | Occidental Petroleum vs. G III Apparel Group | Occidental Petroleum vs. Monument Mining Limited |
| Salesforce vs. COVIVIO HOTELS INH | Salesforce vs. Pebblebrook Hotel Trust | Salesforce vs. DALATA HOTEL | Salesforce vs. Xinhua Winshare Publishing |
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
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |