Correlation Between Retail Estates and Salesforce
Can any of the company-specific risk be diversified away by investing in both Retail Estates 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 Retail Estates and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates NV and Salesforce, you can compare the effects of market volatilities on Retail Estates 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 Retail Estates with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Salesforce.
Diversification Opportunities for Retail Estates and Salesforce
-0.95 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Retail and Salesforce is -0.95. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates NV and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Retail Estates 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 Retail Estates NV 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 Retail Estates i.e., Retail Estates and Salesforce go up and down completely randomly.
Pair Corralation between Retail Estates and Salesforce
Assuming the 90 days horizon Retail Estates is expected to generate 5.05 times less return on investment than Salesforce. But when comparing it to its historical volatility, Retail Estates NV is 1.63 times less risky than Salesforce. It trades about 0.03 of its potential returns per unit of risk. Salesforce is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,346 in Salesforce on September 19, 2024 and sell it today you would earn a total of 21,344 from holding Salesforce or generate 172.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates NV vs. Salesforce
Performance |
| Timeline |
| Retail Estates NV |
| Salesforce |
Retail Estates and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Salesforce
The main advantage of trading using opposite Retail Estates and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates 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.| Retail Estates vs. Vicinity Centres | Retail Estates vs. Superior Plus Corp | Retail Estates vs. NMI Holdings | Retail Estates vs. SIVERS SEMICONDUCTORS AB |
| Salesforce vs. Caseys General Stores | Salesforce vs. ADRIATIC METALS LS 013355 | Salesforce vs. Retail Estates NV | Salesforce vs. LION ONE METALS |
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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