Correlation Between Salesforce and Halliburton
Can any of the company-specific risk be diversified away by investing in both Salesforce and Halliburton 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 Halliburton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Halliburton, you can compare the effects of market volatilities on Salesforce and Halliburton 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 Halliburton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Halliburton.
Diversification Opportunities for Salesforce and Halliburton
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Salesforce and Halliburton is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton 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 Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of Salesforce i.e., Salesforce and Halliburton go up and down completely randomly.
Pair Corralation between Salesforce and Halliburton
Considering the 90-day investment horizon Salesforce is expected to generate 1.09 times more return on investment than Halliburton. However, Salesforce is 1.09 times more volatile than Halliburton. It trades about 0.07 of its potential returns per unit of risk. Halliburton is currently generating about 0.02 per unit of risk. If you would invest 22,531 in Salesforce on January 24, 2024 and sell it today you would earn a total of 4,850 from holding Salesforce or generate 21.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Halliburton
Performance |
| Timeline |
| Salesforce |
| Halliburton |
Salesforce and Halliburton Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Halliburton
The main advantage of trading using opposite Salesforce and Halliburton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Halliburton 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 Halliburton will offset losses from the drop in Halliburton's long position.The idea behind Salesforce and Halliburton 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |