Correlation Between Salesforce and EVN Finance

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

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

Diversification Opportunities for Salesforce and EVN Finance

-0.43

Correlation Coefficient

Salesforce  EVN Finance

Very good diversification

The 3 months correlation between Salesforce and EVN is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and EVN Finance JSC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EVN Finance JSC 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 EVN Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EVN Finance JSC has no effect on the direction of Salesforce i.e., Salesforce and EVN Finance go up and down completely randomly.

Pair Corralation between Salesforce and EVN Finance

Considering the 90-day investment horizon Salesforce is expected to under-perform the EVN Finance. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.34 times less risky than EVN Finance. The stock trades about -0.18 of its potential returns per unit of risk. The EVN Finance JSC is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  972,000  in EVN Finance JSC on December 20, 2024 and sell it today you would earn a total of  63,000  from holding EVN Finance JSC or generate 6.48% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Salesforce  vs.  EVN Finance JSC

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

EVN Finance JSC

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in EVN Finance JSC are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, EVN Finance may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Salesforce and EVN Finance

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

The idea behind Salesforce and EVN Finance JSC 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.