Correlation Between Salesforce and DBS GROUP

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

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

Diversification Opportunities for Salesforce and DBS GROUP

0.93

Correlation Coefficient

Salesforce  DBS GROUP

Almost no diversification

The 3 months correlation between Salesforce and DBS is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and DBS GROUP HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS GROUP HLDGS 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 DBS GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS GROUP HLDGS has no effect on the direction of Salesforce i.e., Salesforce and DBS GROUP go up and down completely randomly.

Pair Corralation between Salesforce and DBS GROUP

Considering the 90-day investment horizon Salesforce is expected to under-perform the DBS GROUP. In addition to that, Salesforce is 2.11 times more volatile than DBS GROUP HLDGS. It trades about -0.29 of its total potential returns per unit of risk. DBS GROUP HLDGS is currently generating about 0.22 per unit of volatility. If you would invest  3,091  in DBS GROUP HLDGS on October 10, 2024 and sell it today you would earn a total of  75.00  from holding DBS GROUP HLDGS or generate 2.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	90.0%
Values	Daily Returns

Salesforce  vs.  DBS GROUP HLDGS

Salesforce

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 7 (%) 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.

DBS GROUP HLDGS

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DBS GROUP HLDGS are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, DBS GROUP unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and DBS GROUP

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

The idea behind Salesforce and DBS GROUP HLDGS 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.