Correlation Between Energisa and Salesforce

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

By analyzing existing cross correlation between Energisa SA and salesforce inc, you can compare the effects of market volatilities on Energisa and Salesforce 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 Energisa with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energisa and Salesforce.

Diversification Opportunities for Energisa and Salesforce

-0.92

Correlation Coefficient

Energisa  Salesforce

Pay attention - limited upside

The 3 months correlation between Energisa and Salesforce is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Energisa SA and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc and Energisa 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 Energisa SA are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of salesforce inc has no effect on the direction of Energisa i.e., Energisa and Salesforce go up and down completely randomly.

Pair Corralation between Energisa and Salesforce

Assuming the 90 days trading horizon Energisa SA is expected to under-perform the Salesforce. But the stock apears to be less risky and, when comparing its historical volatility, Energisa SA is 1.36 times less risky than Salesforce. The stock trades about -0.17 of its potential returns per unit of risk. The salesforce inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  6,385  in salesforce inc on August 31, 2024 and sell it today you would earn a total of  2,664  from holding salesforce inc or generate 41.72% return on investment over 90 days.

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

Energisa SA  vs.  salesforce inc

Energisa SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Energisa SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

salesforce inc

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in salesforce inc are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Salesforce sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Energisa and Salesforce

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

The idea behind Energisa SA and salesforce inc 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.

Check out your portfolio center.

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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.