Correlation Between Salesforce and General Interface

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

By analyzing existing cross correlation between Salesforce and General Interface Solution, you can compare the effects of market volatilities on Salesforce and General Interface 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 General Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and General Interface.

Diversification Opportunities for Salesforce and General Interface

-0.65

Correlation Coefficient

Salesforce  General Interface

Excellent diversification

The 3 months correlation between Salesforce and General is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and General Interface Solution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Interface 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 General Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Interface has no effect on the direction of Salesforce i.e., Salesforce and General Interface go up and down completely randomly.

Pair Corralation between Salesforce and General Interface

Considering the 90-day investment horizon Salesforce is expected to under-perform the General Interface. In addition to that, Salesforce is 1.95 times more volatile than General Interface Solution. It trades about -0.09 of its total potential returns per unit of risk. General Interface Solution is currently generating about 0.27 per unit of volatility. If you would invest  5,630  in General Interface Solution on March 22, 2024 and sell it today you would earn a total of  1,190  from holding General Interface Solution or generate 21.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.35%
Values	Daily Returns

Salesforce  vs.  General Interface Solution

Salesforce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

General Interface

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in General Interface Solution are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, General Interface showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and General Interface

The main advantage of trading using opposite Salesforce and General Interface positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, General Interface 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 General Interface will offset losses from the drop in General Interface's long position.

The idea behind Salesforce and General Interface Solution 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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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.