Correlation Between AudioEye and Salesforce

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

Diversification Opportunities for AudioEye and Salesforce

  Correlation Coefficient

Poor diversification

The 3 months correlation between AudioEye and Salesforce is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding AudioEye and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and AudioEye 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 AudioEye 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 AudioEye i.e., AudioEye and Salesforce go up and down completely randomly.

Pair Corralation between AudioEye and Salesforce

Given the investment horizon of 90 days AudioEye is expected to generate 4.13 times more return on investment than Salesforce. However, AudioEye is 4.13 times more volatile than Salesforce. It trades about 0.09 of its potential returns per unit of risk. Salesforce is currently generating about 0.2 per unit of risk. If you would invest  656.00  in AudioEye on January 1, 2023 and sell it today you would earn a total of  54.00  from holding AudioEye or generate 8.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

AudioEye  vs.  Salesforce

 Performance (%) 

AudioEye Performance

13 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in AudioEye are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, AudioEye exhibited solid returns over the last few months and may actually be approaching a breakup point.

Salesforce Performance

21 of 100

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

AudioEye and Salesforce Volatility Contrast

   Predicted Return Density   

Pair Trading with AudioEye and Salesforce

The main advantage of trading using opposite AudioEye and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AudioEye 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.
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The idea behind AudioEye and Salesforce 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.
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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