Correlation Between Salesforce and CENTR Brands

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Salesforce and CENTR Brands 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 CENTR Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and CENTR Brands Corp, you can compare the effects of market volatilities on Salesforce and CENTR Brands 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 CENTR Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and CENTR Brands.

Diversification Opportunities for Salesforce and CENTR Brands

0.05
  Correlation Coefficient

Significant diversification

The 3 months correlation between Salesforce and CENTR is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CENTR Brands Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTR Brands Corp 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 CENTR Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTR Brands Corp has no effect on the direction of Salesforce i.e., Salesforce and CENTR Brands go up and down completely randomly.

Pair Corralation between Salesforce and CENTR Brands

Considering the 90-day investment horizon Salesforce is expected to under-perform the CENTR Brands. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 273.61 times less risky than CENTR Brands. The stock trades about -0.23 of its potential returns per unit of risk. The CENTR Brands Corp is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  2.00  in CENTR Brands Corp on October 9, 2024 and sell it today you would earn a total of  3.06  from holding CENTR Brands Corp or generate 153.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy78.95%
ValuesDaily Returns

Salesforce  vs.  CENTR Brands Corp

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 9 (%) 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.
CENTR Brands Corp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Solid
Over the last 90 days CENTR Brands Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, CENTR Brands reported solid returns over the last few months and may actually be approaching a breakup point.

Salesforce and CENTR Brands Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and CENTR Brands

The main advantage of trading using opposite Salesforce and CENTR Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, CENTR Brands 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 CENTR Brands will offset losses from the drop in CENTR Brands' long position.
The idea behind Salesforce and CENTR Brands Corp 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

Other Complementary Tools

Sign In To Macroaxis
Sign in to explore Macroaxis' wealth optimization platform and fintech modules
Commodity Directory
Find actively traded commodities issued by global exchanges
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk