Correlation Between Salesforce and Edify Acquisition

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

Diversification Opportunities for Salesforce and Edify Acquisition

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Salesforce and Edify Acquisition

If you would invest  19,520  in Salesforce on December 30, 2023 and sell it today you would earn a total of  10,598  from holding Salesforce or generate 54.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.2%
ValuesDaily Returns

Salesforce  vs.  Edify Acquisition Corp

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

13 of 100

 
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Very Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
Edify Acquisition Corp 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Edify Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Edify Acquisition is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Salesforce and Edify Acquisition Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Edify Acquisition

The main advantage of trading using opposite Salesforce and Edify Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Edify Acquisition 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 Edify Acquisition will offset losses from the drop in Edify Acquisition's long position.
The idea behind Salesforce and Edify Acquisition Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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