Correlation Between CoreCard Corp and Salesforce

Can any of the company-specific risk be diversified away by investing in both CoreCard Corp 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 CoreCard Corp and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CoreCard Corp and Salesforce, you can compare the effects of market volatilities on CoreCard Corp 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 CoreCard Corp with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoreCard Corp and Salesforce.

Diversification Opportunities for CoreCard Corp and Salesforce

-0.37

Correlation Coefficient

CoreCard Corp  Salesforce

Very good diversification

The 3 months correlation between CoreCard and Salesforce is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding CoreCard Corp and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and CoreCard Corp 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 CoreCard Corp 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 CoreCard Corp i.e., CoreCard Corp and Salesforce go up and down completely randomly.

Pair Corralation between CoreCard Corp and Salesforce

Given the investment horizon of 90 days CoreCard Corp is expected to generate 1.64 times more return on investment than Salesforce. However, CoreCard Corp is 1.64 times more volatile than Salesforce. It trades about 0.0 of its potential returns per unit of risk. Salesforce is currently generating about -0.22 per unit of risk. If you would invest  1,072  in CoreCard Corp on January 17, 2024 and sell it today you would lose (10.00) from holding CoreCard Corp or give up 0.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CoreCard Corp  vs.  Salesforce

CoreCard Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CoreCard Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Salesforce

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with CoreCard Corp and Salesforce

The main advantage of trading using opposite CoreCard Corp and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoreCard Corp 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.

The idea behind CoreCard Corp 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.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.