Correlation Between Salesforce and Immobile

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

Diversification Opportunities for Salesforce and Immobile

SalesforceImmobileDiversified AwaySalesforceImmobileDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Salesforce and Immobile is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding PZ Cormay SA and Immobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Immobile 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 PZ Cormay SA are associated (or correlated) with Immobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Immobile has no effect on the direction of Salesforce i.e., Salesforce and Immobile go up and down completely randomly.

Pair Corralation between Salesforce and Immobile

Assuming the 90 days trading horizon PZ Cormay SA is expected to generate 1.77 times more return on investment than Immobile. However, Salesforce is 1.77 times more volatile than Immobile. It trades about 0.09 of its potential returns per unit of risk. Immobile is currently generating about 0.12 per unit of risk. If you would invest  46.00  in PZ Cormay SA on November 24, 2024 and sell it today you would earn a total of  9.00  from holding PZ Cormay SA or generate 19.57% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

PZ Cormay SA  vs.  Immobile

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-5051015
JavaScript chart by amCharts 3.21.15CRM GKI
       Timeline  
PZ Cormay SA 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in PZ Cormay SA are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Salesforce reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.40.450.50.55
Immobile 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Immobile are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Immobile reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1.822.22.42.6

Salesforce and Immobile Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-14.15-10.6-7.05-3.490.06193.657.3611.0814.79 0.010.020.030.040.05
JavaScript chart by amCharts 3.21.15CRM GKI
       Returns  

Pair Trading with Salesforce and Immobile

The main advantage of trading using opposite Salesforce and Immobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Immobile 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 Immobile will offset losses from the drop in Immobile's long position.
The idea behind PZ Cormay SA and Immobile 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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