Correlation Between Salesforce and Sony
Can any of the company-specific risk be diversified away by investing in both Salesforce and Sony 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 Sony into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between salesforce inc and Sony Group, you can compare the effects of market volatilities on Salesforce and Sony 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 Sony. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Sony.
Diversification Opportunities for Salesforce and Sony
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Salesforce and Sony is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding salesforce inc and Sony Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sony Group 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 Sony. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sony Group has no effect on the direction of Salesforce i.e., Salesforce and Sony go up and down completely randomly.
Pair Corralation between Salesforce and Sony
Assuming the 90 days trading horizon Salesforce is expected to generate 17.76 times less return on investment than Sony. But when comparing it to its historical volatility, salesforce inc is 16.95 times less risky than Sony. It trades about 0.07 of its potential returns per unit of risk. Sony Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,475 in Sony Group on November 3, 2024 and sell it today you would earn a total of 3,378 from holding Sony Group or generate 35.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
salesforce inc vs. Sony Group
Performance |
Timeline |
salesforce inc |
Sony Group |
Salesforce and Sony Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salesforce and Sony
The main advantage of trading using opposite Salesforce and Sony positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Sony 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 Sony will offset losses from the drop in Sony's long position.Salesforce vs. Pentair plc | Salesforce vs. G2D Investments | Salesforce vs. Cardinal Health, | Salesforce vs. Patria Investments Limited |
Sony vs. JB Hunt Transport | Sony vs. Liberty Broadband | Sony vs. New Oriental Education | Sony vs. Broadridge Financial Solutions, |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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