Correlation Between Salesforce and Aya Gold

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

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

Diversification Opportunities for Salesforce and Aya Gold

-0.19

Correlation Coefficient

Salesforce  Aya Gold

Good diversification

The 3 months correlation between Salesforce and Aya is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding SalesforceCom CDR and Aya Gold Silver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aya Gold Silver 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 SalesforceCom CDR are associated (or correlated) with Aya Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aya Gold Silver has no effect on the direction of Salesforce i.e., Salesforce and Aya Gold go up and down completely randomly.

Pair Corralation between Salesforce and Aya Gold

Assuming the 90 days trading horizon SalesforceCom CDR is expected to generate 0.4 times more return on investment than Aya Gold. However, SalesforceCom CDR is 2.5 times less risky than Aya Gold. It trades about 0.26 of its potential returns per unit of risk. Aya Gold Silver is currently generating about 0.01 per unit of risk. If you would invest  1,981  in SalesforceCom CDR on September 2, 2024 and sell it today you would earn a total of  650.00  from holding SalesforceCom CDR or generate 32.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

SalesforceCom CDR  vs.  Aya Gold Silver

SalesforceCom CDR

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SalesforceCom CDR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Aya Gold Silver

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aya Gold Silver has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aya Gold is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Aya Gold

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

The idea behind SalesforceCom CDR and Aya Gold Silver 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.