Correlation Between Salesforce and SVENSKA CELLULO

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

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

Diversification Opportunities for Salesforce and SVENSKA CELLULO

-0.15

Correlation Coefficient

Salesforce  SVENSKA CELLULO

Good diversification

The 3 months correlation between Salesforce and SVENSKA is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and SVENSKA CELLULO B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SVENSKA CELLULO B 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 SVENSKA CELLULO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SVENSKA CELLULO B has no effect on the direction of Salesforce i.e., Salesforce and SVENSKA CELLULO go up and down completely randomly.

Pair Corralation between Salesforce and SVENSKA CELLULO

Considering the 90-day investment horizon Salesforce is expected to generate 1.28 times more return on investment than SVENSKA CELLULO. However, Salesforce is 1.28 times more volatile than SVENSKA CELLULO B . It trades about 0.11 of its potential returns per unit of risk. SVENSKA CELLULO B is currently generating about 0.02 per unit of risk. If you would invest  28,411  in Salesforce on October 23, 2024 and sell it today you would earn a total of  4,045  from holding Salesforce or generate 14.24% return on investment over 90 days.

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

Salesforce  vs.  SVENSKA CELLULO B

Salesforce

Risk-Adjusted Performance

8 of 100

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.

SVENSKA CELLULO B

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SVENSKA CELLULO B are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SVENSKA CELLULO is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and SVENSKA CELLULO

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

The idea behind Salesforce and SVENSKA CELLULO B 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.