Correlation Between Salesforce and Guggenheim Macro

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

Diversification Opportunities for Salesforce and Guggenheim Macro

0.85
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Salesforce and Guggenheim is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and GUGGENHEIM MACRO OPPORTUNITIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Macro Opp 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 Guggenheim Macro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Macro Opp has no effect on the direction of Salesforce i.e., Salesforce and Guggenheim Macro go up and down completely randomly.

Pair Corralation between Salesforce and Guggenheim Macro

Considering the 90-day investment horizon Salesforce is expected to generate 8.32 times more return on investment than Guggenheim Macro. However, Salesforce is 8.32 times more volatile than Guggenheim Macro Opportunities. It trades about 0.11 of its potential returns per unit of risk. Guggenheim Macro Opportunities is currently generating about 0.14 per unit of risk. If you would invest  19,694  in Salesforce on December 30, 2023 and sell it today you would earn a total of  10,424  from holding Salesforce or generate 52.93% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.6%
ValuesDaily Returns

Salesforce  vs.  GUGGENHEIM MACRO OPPORTUNITIES

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
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 abnormal basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.
Guggenheim Macro Opp 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Macro Opportunities are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guggenheim Macro is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Salesforce and Guggenheim Macro Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Guggenheim Macro

The main advantage of trading using opposite Salesforce and Guggenheim Macro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Guggenheim Macro 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 Guggenheim Macro will offset losses from the drop in Guggenheim Macro's long position.
The idea behind Salesforce and Guggenheim Macro Opportunities 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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