Correlation Between Salesforce and Ceridian HCM

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

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

Diversification Opportunities for Salesforce and Ceridian HCM

0.56

Correlation Coefficient

Salesforce  Ceridian HCM

Very weak diversification

The 3 months correlation between Salesforce and Ceridian is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Ceridian HCM Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceridian HCM Holding 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 Ceridian HCM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceridian HCM Holding has no effect on the direction of Salesforce i.e., Salesforce and Ceridian HCM go up and down completely randomly.

Pair Corralation between Salesforce and Ceridian HCM

If you would invest  34,279  in Salesforce on September 27, 2024 and sell it today you would earn a total of  164.00  from holding Salesforce or generate 0.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	4.76%
Values	Daily Returns

Salesforce  vs.  Ceridian HCM Holding

Salesforce

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 13 (%) 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.

Ceridian HCM Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ceridian HCM Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Ceridian HCM is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Ceridian HCM

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

The idea behind Salesforce and Ceridian HCM Holding 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.