Correlation Between Salesforce and Svolder AB

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

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

Diversification Opportunities for Salesforce and Svolder AB

-0.47

Correlation Coefficient

Salesforce  Svolder AB

Very good diversification

The 3 months correlation between Salesforce and Svolder is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Svolder AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Svolder AB 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 Svolder AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Svolder AB has no effect on the direction of Salesforce i.e., Salesforce and Svolder AB go up and down completely randomly.

Pair Corralation between Salesforce and Svolder AB

Considering the 90-day investment horizon Salesforce is expected to under-perform the Svolder AB. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.23 times less risky than Svolder AB. The stock trades about -0.13 of its potential returns per unit of risk. The Svolder AB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,200  in Svolder AB on October 25, 2024 and sell it today you would earn a total of  50.00  from holding Svolder AB or generate 0.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	89.47%
Values	Daily Returns

Salesforce  vs.  Svolder AB

Salesforce

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 9 (%) 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.

Svolder AB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Svolder AB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Salesforce and Svolder AB

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

The idea behind Salesforce and Svolder AB 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.