Correlation Between Salesforce and Balkan Mining

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

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

Diversification Opportunities for Salesforce and Balkan Mining

-0.32

Correlation Coefficient

Salesforce  Balkan Mining

Very good diversification

The 3 months correlation between Salesforce and Balkan is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Balkan Mining and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Balkan Mining 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 Balkan Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Balkan Mining has no effect on the direction of Salesforce i.e., Salesforce and Balkan Mining go up and down completely randomly.

Pair Corralation between Salesforce and Balkan Mining

Considering the 90-day investment horizon Salesforce is expected to generate 0.56 times more return on investment than Balkan Mining. However, Salesforce is 1.78 times less risky than Balkan Mining. It trades about 0.08 of its potential returns per unit of risk. Balkan Mining and is currently generating about -0.02 per unit of risk. If you would invest  31,043  in Salesforce on October 8, 2024 and sell it today you would earn a total of  2,247  from holding Salesforce or generate 7.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Salesforce  vs.  Balkan Mining and

Salesforce

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 8 (%) 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.

Balkan Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Balkan Mining and has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Balkan Mining is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Balkan Mining

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

The idea behind Salesforce and Balkan Mining and 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 CEOs Directory module to screen CEOs from public companies around the world.