Correlation Between Salesforce and TEN SQUARE

Can any of the company-specific risk be diversified away by investing in both Salesforce and TEN SQUARE 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 TEN SQUARE 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 TEN SQUARE GAMES, you can compare the effects of market volatilities on Salesforce and TEN SQUARE 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 TEN SQUARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and TEN SQUARE.

Diversification Opportunities for Salesforce and TEN SQUARE

0.75

Correlation Coefficient

Salesforce  TEN SQUARE

Poor diversification

The 3 months correlation between Salesforce and TEN is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding PZ Cormay SA and TEN SQUARE GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TEN SQUARE GAMES 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 TEN SQUARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TEN SQUARE GAMES has no effect on the direction of Salesforce i.e., Salesforce and TEN SQUARE go up and down completely randomly.

Pair Corralation between Salesforce and TEN SQUARE

Assuming the 90 days trading horizon PZ Cormay SA is expected to under-perform the TEN SQUARE. But the stock apears to be less risky and, when comparing its historical volatility, PZ Cormay SA is 1.24 times less risky than TEN SQUARE. The stock trades about -0.06 of its potential returns per unit of risk. The TEN SQUARE GAMES is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  13,000  in TEN SQUARE GAMES on September 13, 2024 and sell it today you would lose (5,170) from holding TEN SQUARE GAMES or give up 39.77% of portfolio value over 90 days.

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

PZ Cormay SA  vs.  TEN SQUARE GAMES

PZ Cormay SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PZ Cormay SA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

TEN SQUARE GAMES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TEN SQUARE GAMES has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Salesforce and TEN SQUARE

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

The idea behind PZ Cormay SA and TEN SQUARE GAMES 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.