Correlation Between Salesforce and Integrated Media

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

Diversification Opportunities for Salesforce and Integrated Media

-0.68
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Salesforce and Integrated is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec 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 Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Salesforce i.e., Salesforce and Integrated Media go up and down completely randomly.

Pair Corralation between Salesforce and Integrated Media

Considering the 90-day investment horizon Salesforce is expected to generate 0.37 times more return on investment than Integrated Media. However, Salesforce is 2.68 times less risky than Integrated Media. It trades about 0.1 of its potential returns per unit of risk. Integrated Media Technology is currently generating about -0.03 per unit of risk. If you would invest  15,603  in Salesforce on December 29, 2023 and sell it today you would earn a total of  14,535  from holding Salesforce or generate 93.16% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  Integrated Media Technology

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

11 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 11 (%) 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.
Integrated Media Tec 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Integrated Media Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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 and Integrated Media Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Integrated Media

The main advantage of trading using opposite Salesforce and Integrated Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Integrated Media 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 Integrated Media will offset losses from the drop in Integrated Media's long position.
The idea behind Salesforce and Integrated Media Technology 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.

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