Correlation Between Salesforce and Citrix Systems
Can any of the company-specific risk be diversified away by investing in both Salesforce and Citrix Systems 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 Citrix Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Citrix Systems, you can compare the effects of market volatilities on Salesforce and Citrix Systems 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 Citrix Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Citrix Systems.
Diversification Opportunities for Salesforce and Citrix Systems
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Salesforce and Citrix is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Citrix Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citrix Systems 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 are associated (or correlated) with Citrix Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citrix Systems has no effect on the direction of Salesforce i.e., Salesforce and Citrix Systems go up and down completely randomly.
Pair Corralation between Salesforce and Citrix Systems
Considering the 90-day investment horizon Salesforce is expected to generate 2.33 times more return on investment than Citrix Systems. However, Salesforce is 2.33 times more volatile than Citrix Systems. It trades about 0.05 of its potential returns per unit of risk. Citrix Systems is currently generating about 0.04 per unit of risk. If you would invest 17,734 in Salesforce on January 20, 2024 and sell it today you would earn a total of 9,458 from holding Salesforce or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 21.41% |
| Values | Daily Returns |
Salesforce vs. Citrix Systems
Performance |
| Timeline |
| Salesforce |
| Citrix Systems |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Salesforce and Citrix Systems Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Citrix Systems
The main advantage of trading using opposite Salesforce and Citrix Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Citrix Systems 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 Citrix Systems will offset losses from the drop in Citrix Systems' long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Citrix Systems vs. Mill City Ventures | Citrix Systems vs. PennantPark Floating Rate | Citrix Systems vs. Malaga Financial | Citrix Systems vs. Univest Pennsylvania |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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