Correlation Between Salesforce and InflaRx NV

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Can any of the company-specific risk be diversified away by investing in both Salesforce and InflaRx NV 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 InflaRx NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and InflaRx NV, you can compare the effects of market volatilities on Salesforce and InflaRx NV 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 InflaRx NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and InflaRx NV.

Diversification Opportunities for Salesforce and InflaRx NV

0.71
  Correlation Coefficient

Poor diversification

The 3 months correlation between Salesforce and InflaRx is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and InflaRx NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InflaRx NV 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 InflaRx NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InflaRx NV has no effect on the direction of Salesforce i.e., Salesforce and InflaRx NV go up and down completely randomly.

Pair Corralation between Salesforce and InflaRx NV

Considering the 90-day investment horizon Salesforce is expected to generate 3.66 times less return on investment than InflaRx NV. But when comparing it to its historical volatility, Salesforce is 2.43 times less risky than InflaRx NV. It trades about 0.1 of its potential returns per unit of risk. InflaRx NV is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  151.00  in InflaRx NV on October 11, 2024 and sell it today you would earn a total of  82.00  from holding InflaRx NV or generate 54.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  InflaRx NV

 Performance 
       Timeline  
Salesforce 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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.
InflaRx NV 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in InflaRx NV are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, InflaRx NV showed solid returns over the last few months and may actually be approaching a breakup point.

Salesforce and InflaRx NV Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and InflaRx NV

The main advantage of trading using opposite Salesforce and InflaRx NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, InflaRx NV 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 InflaRx NV will offset losses from the drop in InflaRx NV's long position.
The idea behind Salesforce and InflaRx NV 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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