Correlation Between Salesforce and Hotel Shilla

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

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

Diversification Opportunities for Salesforce and Hotel Shilla

-0.75

Correlation Coefficient

Salesforce  Hotel Shilla

Pay attention - limited upside

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

Pair Corralation between Salesforce and Hotel Shilla

Considering the 90-day investment horizon Salesforce is expected to under-perform the Hotel Shilla. In addition to that, Salesforce is 1.06 times more volatile than Hotel Shilla Co. It trades about -0.18 of its total potential returns per unit of risk. Hotel Shilla Co is currently generating about 0.12 per unit of volatility. If you would invest  3,045,000  in Hotel Shilla Co on December 24, 2024 and sell it today you would earn a total of  340,000  from holding Hotel Shilla Co or generate 11.17% return on investment over 90 days.

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

Salesforce  vs.  Hotel Shilla Co

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hotel Shilla

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hotel Shilla Co are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hotel Shilla may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Salesforce and Hotel Shilla

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

The idea behind Salesforce and Hotel Shilla Co 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.