Correlation Between Salesforce and Giantec Semiconductor

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

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

Diversification Opportunities for Salesforce and Giantec Semiconductor

-0.69

Correlation Coefficient

Salesforce  Giantec Semiconductor

Excellent diversification

The 3 months correlation between Salesforce and Giantec is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Giantec Semiconductor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giantec Semiconductor 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 Giantec Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giantec Semiconductor has no effect on the direction of Salesforce i.e., Salesforce and Giantec Semiconductor go up and down completely randomly.

Pair Corralation between Salesforce and Giantec Semiconductor

Considering the 90-day investment horizon Salesforce is expected to under-perform the Giantec Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.37 times less risky than Giantec Semiconductor. The stock trades about -0.14 of its potential returns per unit of risk. The Giantec Semiconductor Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6,257  in Giantec Semiconductor Corp on December 25, 2024 and sell it today you would earn a total of  1,779  from holding Giantec Semiconductor Corp or generate 28.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.67%
Values	Daily Returns

Salesforce  vs.  Giantec Semiconductor Corp

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.

Giantec Semiconductor

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Giantec Semiconductor Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Giantec Semiconductor sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Giantec Semiconductor

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

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