Correlation Between First Hydrogen and Salesforce

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

By analyzing existing cross correlation between First Hydrogen Corp and SalesforceCom CDR, you can compare the effects of market volatilities on First Hydrogen 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 First Hydrogen with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Hydrogen and Salesforce.

Diversification Opportunities for First Hydrogen and Salesforce

-0.64

Correlation Coefficient

First Hydrogen  Salesforce

Excellent diversification

The 3 months correlation between First and Salesforce is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding First Hydrogen Corp and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR and First Hydrogen 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 First Hydrogen Corp 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 SalesforceCom CDR has no effect on the direction of First Hydrogen i.e., First Hydrogen and Salesforce go up and down completely randomly.

Pair Corralation between First Hydrogen and Salesforce

Assuming the 90 days trading horizon First Hydrogen Corp is expected to generate 5.07 times more return on investment than Salesforce. However, First Hydrogen is 5.07 times more volatile than SalesforceCom CDR. It trades about 0.03 of its potential returns per unit of risk. SalesforceCom CDR is currently generating about -0.22 per unit of risk. If you would invest  36.00  in First Hydrogen Corp on October 11, 2024 and sell it today you would earn a total of  0.00  from holding First Hydrogen Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.0%
Values	Daily Returns

First Hydrogen Corp  vs.  SalesforceCom CDR

First Hydrogen Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Hydrogen Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, First Hydrogen is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

SalesforceCom CDR

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in SalesforceCom CDR 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.

Pair Trading with First Hydrogen and Salesforce

The main advantage of trading using opposite First Hydrogen and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Hydrogen 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 First Hydrogen Corp and SalesforceCom CDR 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.