Correlation Between Singapore Telecommunicatio and Salesforce
Can any of the company-specific risk be diversified away by investing in both Singapore Telecommunicatio 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 Telecommunicatio and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Singapore Telecommunications Limited and Salesforce, you can compare the effects of market volatilities on Singapore Telecommunicatio 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 Telecommunicatio with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Singapore Telecommunicatio and Salesforce.
Diversification Opportunities for Singapore Telecommunicatio and Salesforce
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Singapore and Salesforce is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Singapore Telecommunications L and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Singapore Telecommunicatio 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 Telecommunications Limited 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 Telecommunicatio i.e., Singapore Telecommunicatio and Salesforce go up and down completely randomly.
Pair Corralation between Singapore Telecommunicatio and Salesforce
Assuming the 90 days trading horizon Singapore Telecommunicatio is expected to generate 17.98 times less return on investment than Salesforce. But when comparing it to its historical volatility, Singapore Telecommunications Limited is 1.58 times less risky than Salesforce. It trades about 0.02 of its potential returns per unit of risk. Salesforce is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 27,505 in Salesforce on August 31, 2024 and sell it today you would earn a total of 4,045 from holding Salesforce or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Singapore Telecommunications L vs. Salesforce
Performance |
| Timeline |
| Singapore Telecommunicatio |
| Salesforce |
Singapore Telecommunicatio and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Singapore Telecommunicatio and Salesforce
The main advantage of trading using opposite Singapore Telecommunicatio and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Singapore Telecommunicatio 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 Telecommunicatio vs. ATT Inc | Singapore Telecommunicatio vs. Deutsche Telekom AG | Singapore Telecommunicatio vs. Superior Plus Corp | Singapore Telecommunicatio vs. NMI Holdings |
| Salesforce vs. SAP 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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