Correlation Between Salesforce and General Dynamics
Can any of the company-specific risk be diversified away by investing in both Salesforce and General Dynamics 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 General Dynamics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between salesforce inc and General Dynamics, you can compare the effects of market volatilities on Salesforce and General Dynamics 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 General Dynamics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and General Dynamics.
Diversification Opportunities for Salesforce and General Dynamics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and General is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding salesforce inc and General Dynamics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Dynamics 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 General Dynamics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Dynamics has no effect on the direction of Salesforce i.e., Salesforce and General Dynamics go up and down completely randomly.
Pair Corralation between Salesforce and General Dynamics
Assuming the 90 days trading horizon salesforce inc is expected to generate 1.65 times more return on investment than General Dynamics. However, Salesforce is 1.65 times more volatile than General Dynamics. It trades about 0.13 of its potential returns per unit of risk. General Dynamics is currently generating about -0.07 per unit of risk. If you would invest 7,674 in salesforce inc on October 26, 2024 and sell it today you would earn a total of 1,575 from holding salesforce inc or generate 20.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
salesforce inc vs. General Dynamics
Performance |
| Timeline |
| salesforce inc |
| General Dynamics |
Salesforce and General Dynamics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and General Dynamics
The main advantage of trading using opposite Salesforce and General Dynamics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, General Dynamics 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 General Dynamics will offset losses from the drop in General Dynamics' long position.| Salesforce vs. Palantir Technologies | Salesforce vs. Unity Software | Salesforce vs. TechnipFMC plc | Salesforce vs. Align Technology |
| General Dynamics vs. Guidewire Software, | General Dynamics vs. Credit Acceptance | General Dynamics vs. Annaly Capital Management, | General Dynamics vs. HDFC Bank Limited |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |