Correlation Between Salesforce and Shyft

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

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

Diversification Opportunities for Salesforce and Shyft

0.18

Correlation Coefficient

Salesforce  Shyft

Average diversification

The 3 months correlation between Salesforce and Shyft is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Shyft Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyft Group 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 Shyft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyft Group has no effect on the direction of Salesforce i.e., Salesforce and Shyft go up and down completely randomly.

Pair Corralation between Salesforce and Shyft

Considering the 90-day investment horizon Salesforce is expected to generate 1.07 times more return on investment than Shyft. However, Salesforce is 1.07 times more volatile than Shyft Group. It trades about 0.01 of its potential returns per unit of risk. Shyft Group is currently generating about -0.07 per unit of risk. If you would invest  32,684  in Salesforce on November 19, 2024 and sell it today you would lose (30.00) from holding Salesforce or give up 0.09% of portfolio value over 90 days.

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

Salesforce  vs.  Shyft Group

Salesforce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Shyft Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shyft Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Shyft is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Salesforce and Shyft

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

The idea behind Salesforce and Shyft Group 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 CEOs Directory module to screen CEOs from public companies around the world.