Correlation Between SINGAPORE AIRLINES and Salesforce
Can any of the company-specific risk be diversified away by investing in both SINGAPORE AIRLINES 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 SINGAPORE AIRLINES and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SINGAPORE AIRLINES and Salesforce, you can compare the effects of market volatilities on SINGAPORE AIRLINES 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 SINGAPORE AIRLINES with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of SINGAPORE AIRLINES and Salesforce.
Diversification Opportunities for SINGAPORE AIRLINES and Salesforce
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SINGAPORE and Salesforce is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SINGAPORE AIRLINES and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and SINGAPORE AIRLINES 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 SINGAPORE AIRLINES 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 SINGAPORE AIRLINES i.e., SINGAPORE AIRLINES and Salesforce go up and down completely randomly.
Pair Corralation between SINGAPORE AIRLINES and Salesforce
Assuming the 90 days trading horizon SINGAPORE AIRLINES is expected to generate 19.86 times less return on investment than Salesforce. But when comparing it to its historical volatility, SINGAPORE AIRLINES is 2.7 times less risky than Salesforce. It trades about 0.04 of its potential returns per unit of risk. Salesforce is currently generating about 0.26 of returns per unit of risk over similar time horizon. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SINGAPORE AIRLINES vs. Salesforce
Performance |
| Timeline |
| SINGAPORE AIRLINES |
| Salesforce |
SINGAPORE AIRLINES and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SINGAPORE AIRLINES and Salesforce
The main advantage of trading using opposite SINGAPORE AIRLINES and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SINGAPORE AIRLINES 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.| SINGAPORE AIRLINES vs. REVO INSURANCE SPA | SINGAPORE AIRLINES vs. ALBIS LEASING AG | SINGAPORE AIRLINES vs. Evolution Mining Limited | SINGAPORE AIRLINES vs. PT Bank Maybank |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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