Correlation Between Salesforce and BK Variable

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

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

Diversification Opportunities for Salesforce and BK Variable

0.8

Correlation Coefficient

Salesforce  BK Variable

Very poor diversification

The 3 months correlation between Salesforce and 0P0000120T is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and BK Variable Internacional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BK Variable Internacional 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 BK Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BK Variable Internacional has no effect on the direction of Salesforce i.e., Salesforce and BK Variable go up and down completely randomly.

Pair Corralation between Salesforce and BK Variable

Considering the 90-day investment horizon Salesforce is expected to generate 2.88 times more return on investment than BK Variable. However, Salesforce is 2.88 times more volatile than BK Variable Internacional. It trades about 0.1 of its potential returns per unit of risk. BK Variable Internacional is currently generating about 0.05 per unit of risk. If you would invest  29,131  in Salesforce on October 12, 2024 and sell it today you would earn a total of  3,559  from holding Salesforce or generate 12.22% return on investment over 90 days.

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

Salesforce  vs.  BK Variable Internacional

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.

BK Variable Internacional

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BK Variable Internacional are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong basic indicators, BK Variable is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and BK Variable

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

The idea behind Salesforce and BK Variable Internacional 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.