Correlation Between Macys and Salesforce
Can any of the company-specific risk be diversified away by investing in both Macys 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 Macys and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Macys Inc and Salesforce, you can compare the effects of market volatilities on Macys 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 Macys with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Macys and Salesforce.
Diversification Opportunities for Macys and Salesforce
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Macys and Salesforce is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Macys Inc and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Macys 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 Macys Inc 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 Macys i.e., Macys and Salesforce go up and down completely randomly.
Pair Corralation between Macys and Salesforce
Taking into account the 90-day investment horizon Macys Inc is expected to under-perform the Salesforce. In addition to that, Macys is 1.2 times more volatile than Salesforce. It trades about -0.25 of its total potential returns per unit of risk. Salesforce is currently generating about -0.27 per unit of volatility. If you would invest 30,608 in Salesforce on January 20, 2024 and sell it today you would lose (3,416) from holding Salesforce or give up 11.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Macys Inc vs. Salesforce
Performance |
| Timeline |
| Macys Inc |
| Salesforce |
Macys and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Macys and Salesforce
The main advantage of trading using opposite Macys and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macys 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.| Macys vs. Marks Spencer Group | Macys vs. Marks and Spencer | Macys vs. Dillards Capital Trust | Macys vs. Companhia Brasileira de |
| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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