Correlation Between Salesforce and Integrated Media
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 Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Salesforce vs. Integrated Media Technology
Performance |
Timeline |
Salesforce |
Integrated Media Tec |
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.Salesforce vs. Kingsoft Cloud HoldingsLtd | Salesforce vs. C3 Ai Inc | Salesforce vs. Eventbrite Class A | Salesforce vs. Daily Journal Corp |
Integrated Media vs. Kimball Electronics | Integrated Media vs. Ubiquiti Networks | Integrated Media vs. Moving IMage Technologies | Integrated Media vs. AmpliTech Group |
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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