Correlation Between Salesforce and Shenzhen Hans

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

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

Diversification Opportunities for Salesforce and Shenzhen Hans

-0.63

Correlation Coefficient

Salesforce  Shenzhen Hans

Excellent diversification

The 3 months correlation between Salesforce and Shenzhen is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Shenzhen Hans CNC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen Hans CNC 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 Shenzhen Hans. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen Hans CNC has no effect on the direction of Salesforce i.e., Salesforce and Shenzhen Hans go up and down completely randomly.

Pair Corralation between Salesforce and Shenzhen Hans

Considering the 90-day investment horizon Salesforce is expected to under-perform the Shenzhen Hans. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.38 times less risky than Shenzhen Hans. The stock trades about -0.16 of its potential returns per unit of risk. The Shenzhen Hans CNC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  3,731  in Shenzhen Hans CNC on December 24, 2024 and sell it today you would earn a total of  306.00  from holding Shenzhen Hans CNC or generate 8.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

Salesforce  vs.  Shenzhen Hans CNC

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.

Shenzhen Hans CNC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Hans CNC are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Hans may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Salesforce and Shenzhen Hans

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

The idea behind Salesforce and Shenzhen Hans CNC 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 Commodity Directory module to find actively traded commodities issued by global exchanges.