Correlation Between Salesforce and Yantai Jereh

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

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

Diversification Opportunities for Salesforce and Yantai Jereh

0.01

Correlation Coefficient

Salesforce  Yantai Jereh

Significant diversification

The 3 months correlation between Salesforce and Yantai is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Yantai Jereh Oilfield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yantai Jereh Oilfield 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 Yantai Jereh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yantai Jereh Oilfield has no effect on the direction of Salesforce i.e., Salesforce and Yantai Jereh go up and down completely randomly.

Pair Corralation between Salesforce and Yantai Jereh

Considering the 90-day investment horizon Salesforce is expected to under-perform the Yantai Jereh. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.03 times less risky than Yantai Jereh. The stock trades about -0.28 of its potential returns per unit of risk. The Yantai Jereh Oilfield is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest  3,321  in Yantai Jereh Oilfield on October 22, 2024 and sell it today you would earn a total of  572.00  from holding Yantai Jereh Oilfield or generate 17.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.0%
Values	Daily Returns

Salesforce  vs.  Yantai Jereh Oilfield

Salesforce

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 7 (%) 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.

Yantai Jereh Oilfield

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yantai Jereh Oilfield are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yantai Jereh sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Yantai Jereh

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

The idea behind Salesforce and Yantai Jereh Oilfield 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.