Correlation Between Salesforce and Accsys Technologies

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

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

Diversification Opportunities for Salesforce and Accsys Technologies

0.34

Correlation Coefficient

Salesforce  Accsys Technologies

Weak diversification

The 3 months correlation between Salesforce and Accsys is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Accsys Technologies PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accsys Technologies PLC 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 Accsys Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accsys Technologies PLC has no effect on the direction of Salesforce i.e., Salesforce and Accsys Technologies go up and down completely randomly.

Pair Corralation between Salesforce and Accsys Technologies

Considering the 90-day investment horizon Salesforce is expected to generate 0.8 times more return on investment than Accsys Technologies. However, Salesforce is 1.25 times less risky than Accsys Technologies. It trades about 0.01 of its potential returns per unit of risk. Accsys Technologies PLC is currently generating about -0.06 per unit of risk. If you would invest  32,533  in Salesforce on November 20, 2024 and sell it today you would earn a total of  121.00  from holding Salesforce or generate 0.37% return on investment over 90 days.

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

Salesforce  vs.  Accsys Technologies PLC

Salesforce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Accsys Technologies PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days Accsys Technologies PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Salesforce and Accsys Technologies

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

The idea behind Salesforce and Accsys Technologies PLC 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.