Correlation Between Ping An and Salesforce
Can any of the company-specific risk be diversified away by investing in both Ping An 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 Ping An and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ping An Insurance and Salesforce, you can compare the effects of market volatilities on Ping An 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 Ping An with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ping An and Salesforce.
Diversification Opportunities for Ping An and Salesforce
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ping and Salesforce is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ping An Insurance and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Ping An 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 Ping An Insurance 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 Ping An i.e., Ping An and Salesforce go up and down completely randomly.
Pair Corralation between Ping An and Salesforce
Assuming the 90 days trading horizon Ping An Insurance is expected to under-perform the Salesforce. In addition to that, Ping An is 1.05 times more volatile than Salesforce. It trades about -0.06 of its total potential returns per unit of risk. Salesforce is currently generating about 0.26 per unit of volatility. If you would invest 27,040 in Salesforce on September 3, 2024 and sell it today you would earn a total of 4,365 from holding Salesforce or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ping An Insurance vs. Salesforce
Performance |
| Timeline |
| Ping An Insurance |
| Salesforce |
Ping An and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ping An and Salesforce
The main advantage of trading using opposite Ping An and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ping An 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.| Ping An vs. LION ONE METALS | Ping An vs. IDP EDUCATION LTD | Ping An vs. DEVRY EDUCATION GRP | Ping An vs. Perseus Mining Limited |
| Salesforce vs. Rocket Internet SE | Salesforce vs. Superior Plus Corp | Salesforce vs. NMI Holdings | Salesforce vs. Origin Agritech |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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