Correlation Between Salesforce and Thrace Plastics

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

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

Diversification Opportunities for Salesforce and Thrace Plastics

-0.09

Correlation Coefficient

Salesforce  Thrace Plastics

Good diversification

The 3 months correlation between Salesforce and Thrace is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Thrace Plastics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thrace Plastics 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 Thrace Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thrace Plastics Holding has no effect on the direction of Salesforce i.e., Salesforce and Thrace Plastics go up and down completely randomly.

Pair Corralation between Salesforce and Thrace Plastics

Considering the 90-day investment horizon Salesforce is expected to under-perform the Thrace Plastics. In addition to that, Salesforce is 1.19 times more volatile than Thrace Plastics Holding. It trades about -0.18 of its total potential returns per unit of risk. Thrace Plastics Holding is currently generating about 0.06 per unit of volatility. If you would invest  392.00  in Thrace Plastics Holding on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Thrace Plastics Holding or generate 5.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Salesforce  vs.  Thrace Plastics Holding

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.

Thrace Plastics Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Thrace Plastics Holding are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Thrace Plastics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Thrace Plastics

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

The idea behind Salesforce and Thrace Plastics 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.