Correlation Between Salesforce and Jade Gas

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

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

Diversification Opportunities for Salesforce and Jade Gas

0.44

Correlation Coefficient

Salesforce  Jade Gas

Very weak diversification

The 3 months correlation between Salesforce and Jade is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Jade Gas Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jade Gas Holdings 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 Jade Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jade Gas Holdings has no effect on the direction of Salesforce i.e., Salesforce and Jade Gas go up and down completely randomly.

Pair Corralation between Salesforce and Jade Gas

Considering the 90-day investment horizon Salesforce is expected to under-perform the Jade Gas. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.88 times less risky than Jade Gas. The stock trades about -0.18 of its potential returns per unit of risk. The Jade Gas Holdings is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  3.60  in Jade Gas Holdings on December 22, 2024 and sell it today you would lose (0.80) from holding Jade Gas Holdings or give up 22.22% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Salesforce  vs.  Jade Gas Holdings

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.

Jade Gas Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jade Gas Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Salesforce and Jade Gas

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

The idea behind Salesforce and Jade Gas Holdings 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.