Correlation Between Salesforce and Akr Corporindo

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

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

Diversification Opportunities for Salesforce and Akr Corporindo

-0.63

Correlation Coefficient

Salesforce  Akr Corporindo

Excellent diversification

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

Pair Corralation between Salesforce and Akr Corporindo

Considering the 90-day investment horizon Salesforce is expected to generate 0.82 times more return on investment than Akr Corporindo. However, Salesforce is 1.22 times less risky than Akr Corporindo. It trades about 0.27 of its potential returns per unit of risk. Akr Corporindo Tbk is currently generating about -0.14 per unit of risk. If you would invest  24,767  in Salesforce on August 31, 2024 and sell it today you would earn a total of  8,232  from holding Salesforce or generate 33.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Salesforce  vs.  Akr Corporindo Tbk

Salesforce

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 21 (%) 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.

Akr Corporindo Tbk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akr Corporindo Tbk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Salesforce and Akr Corporindo

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

The idea behind Salesforce and Akr Corporindo Tbk 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.