Correlation Between Salesforce and Eastman Chemical
Can any of the company-specific risk be diversified away by investing in both Salesforce and Eastman Chemical 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 Salesforce and Eastman Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between salesforce inc and Eastman Chemical, you can compare the effects of market volatilities on Salesforce and Eastman Chemical 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 Salesforce with a short position of Eastman Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Eastman Chemical.
Diversification Opportunities for Salesforce and Eastman Chemical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salesforce and Eastman is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding salesforce inc and Eastman Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastman Chemical and Salesforce 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 salesforce inc are associated (or correlated) with Eastman Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastman Chemical has no effect on the direction of Salesforce i.e., Salesforce and Eastman Chemical go up and down completely randomly.
Pair Corralation between Salesforce and Eastman Chemical
Assuming the 90 days trading horizon salesforce inc is expected to generate 1.89 times more return on investment than Eastman Chemical. However, Salesforce is 1.89 times more volatile than Eastman Chemical. It trades about 0.1 of its potential returns per unit of risk. Eastman Chemical is currently generating about 0.05 per unit of risk. If you would invest 3,667 in salesforce inc on October 13, 2024 and sell it today you would earn a total of 5,165 from holding salesforce inc or generate 140.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
salesforce inc vs. Eastman Chemical
Performance |
| Timeline |
| salesforce inc |
| Eastman Chemical |
Salesforce and Eastman Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Eastman Chemical
The main advantage of trading using opposite Salesforce and Eastman Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Eastman Chemical 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 Eastman Chemical will offset losses from the drop in Eastman Chemical's long position.| Salesforce vs. Taiwan Semiconductor Manufacturing | Salesforce vs. Sumitomo Mitsui Financial | Salesforce vs. Credit Acceptance | Salesforce vs. Jefferies Financial Group |
| Eastman Chemical vs. Braskem SA | Eastman Chemical vs. Braskem SA | Eastman Chemical vs. Braskem SA | Eastman Chemical vs. Unipar Carbocloro SA |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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