Correlation Between Salesforce and Blockmate Ventures

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

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

Diversification Opportunities for Salesforce and Blockmate Ventures

0.33

Correlation Coefficient

Salesforce  Blockmate Ventures

Weak diversification

The 3 months correlation between Salesforce and Blockmate is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding SalesforceCom CDR and Blockmate Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blockmate Ventures 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 Blockmate Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blockmate Ventures has no effect on the direction of Salesforce i.e., Salesforce and Blockmate Ventures go up and down completely randomly.

Pair Corralation between Salesforce and Blockmate Ventures

Assuming the 90 days trading horizon SalesforceCom CDR is expected to under-perform the Blockmate Ventures. But the stock apears to be less risky and, when comparing its historical volatility, SalesforceCom CDR is 10.69 times less risky than Blockmate Ventures. The stock trades about -0.22 of its potential returns per unit of risk. The Blockmate Ventures is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  21.00  in Blockmate Ventures on October 24, 2024 and sell it today you would earn a total of  12.00  from holding Blockmate Ventures or generate 57.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

SalesforceCom CDR  vs.  Blockmate Ventures

SalesforceCom CDR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SalesforceCom CDR are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Blockmate Ventures

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blockmate Ventures are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Blockmate Ventures showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Blockmate Ventures

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

The idea behind SalesforceCom CDR and Blockmate Ventures 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.