Correlation Between Salesforce and Schweizer Electronic

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

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

Diversification Opportunities for Salesforce and Schweizer Electronic

-0.54

Correlation Coefficient

Salesforce  Schweizer Electronic

Excellent diversification

The 3 months correlation between Salesforce and Schweizer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Schweizer Electronic AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizer Electronic 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 Schweizer Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizer Electronic has no effect on the direction of Salesforce i.e., Salesforce and Schweizer Electronic go up and down completely randomly.

Pair Corralation between Salesforce and Schweizer Electronic

Assuming the 90 days trading horizon Salesforce is expected to under-perform the Schweizer Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 11.55 times less risky than Schweizer Electronic. The stock trades about -0.15 of its potential returns per unit of risk. The Schweizer Electronic AG is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  240.00  in Schweizer Electronic AG on December 26, 2024 and sell it today you would earn a total of  222.00  from holding Schweizer Electronic AG or generate 92.5% return on investment over 90 days.

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

Salesforce  vs.  Schweizer Electronic AG

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Schweizer Electronic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Schweizer Electronic AG are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Schweizer Electronic reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Schweizer Electronic

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

The idea behind Salesforce and Schweizer Electronic AG 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.