Correlation Between Salesforce and BAIGAI

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Can any of the company-specific risk be diversified away by investing in both Salesforce and BAIGAI 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 BAIGAI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Investeringsforeningen Bankinvest , you can compare the effects of market volatilities on Salesforce and BAIGAI 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 BAIGAI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and BAIGAI.

Diversification Opportunities for Salesforce and BAIGAI

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Salesforce and BAIGAI is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Investeringsforeningen Bankinv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investeringsforeningen 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 BAIGAI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investeringsforeningen has no effect on the direction of Salesforce i.e., Salesforce and BAIGAI go up and down completely randomly.

Pair Corralation between Salesforce and BAIGAI

Considering the 90-day investment horizon Salesforce is expected to generate 2.72 times more return on investment than BAIGAI. However, Salesforce is 2.72 times more volatile than Investeringsforeningen Bankinvest . It trades about 0.05 of its potential returns per unit of risk. Investeringsforeningen Bankinvest is currently generating about 0.05 per unit of risk. If you would invest  19,520  in Salesforce on December 30, 2023 and sell it today you would earn a total of  10,598  from holding Salesforce or generate 54.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy99.8%
ValuesDaily Returns

Salesforce  vs.  Investeringsforeningen Bankinv

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
Investeringsforeningen 

Risk-Adjusted Performance

22 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Bankinvest are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, BAIGAI may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Salesforce and BAIGAI Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and BAIGAI

The main advantage of trading using opposite Salesforce and BAIGAI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, BAIGAI 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 BAIGAI will offset losses from the drop in BAIGAI's long position.
The idea behind Salesforce and Investeringsforeningen Bankinvest pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Global Correlations module to find global opportunities by holding instruments from different markets.

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