Correlation Between Salesforce and CooTek

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

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

Diversification Opportunities for Salesforce and CooTek

0.0

Correlation Coefficient

Salesforce  CooTek

Pay attention - limited upside

The 3 months correlation between Salesforce and CooTek is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CooTek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CooTek Inc 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 CooTek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CooTek Inc has no effect on the direction of Salesforce i.e., Salesforce and CooTek go up and down completely randomly.

Pair Corralation between Salesforce and CooTek

If you would invest (100.00) in CooTek Inc on January 20, 2024 and sell it today you would earn a total of  100.00  from holding CooTek Inc or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Salesforce  vs.  CooTek Inc

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 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.

CooTek Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CooTek Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, CooTek is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Salesforce and CooTek

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

The idea behind Salesforce and CooTek Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..