Correlation Between SALESFORCE INC and SSP Group

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

By analyzing existing cross correlation between SALESFORCE INC CDR and SSP Group PLC, you can compare the effects of market volatilities on SALESFORCE INC and SSP Group 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 INC with a short position of SSP Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and SSP Group.

Diversification Opportunities for SALESFORCE INC and SSP Group

0.42

Correlation Coefficient

SALESFORCE INC  SSP Group

Very weak diversification

The 3 months correlation between SALESFORCE and SSP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and SSP Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSP Group PLC and SALESFORCE INC 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 INC CDR are associated (or correlated) with SSP Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSP Group PLC has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and SSP Group go up and down completely randomly.

Pair Corralation between SALESFORCE INC and SSP Group

Assuming the 90 days trading horizon SALESFORCE INC CDR is expected to under-perform the SSP Group. But the stock apears to be less risky and, when comparing its historical volatility, SALESFORCE INC CDR is 1.17 times less risky than SSP Group. The stock trades about -0.27 of its potential returns per unit of risk. The SSP Group PLC is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  204.00  in SSP Group PLC on October 23, 2024 and sell it today you would lose (4.00) from holding SSP Group PLC or give up 1.96% of portfolio value over 90 days.

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

SALESFORCE INC CDR  vs.  SSP Group PLC

SALESFORCE INC CDR

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SALESFORCE INC CDR are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SALESFORCE INC reported solid returns over the last few months and may actually be approaching a breakup point.

SSP Group PLC

Risk-Adjusted Performance

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in SSP Group PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, SSP Group is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with SALESFORCE INC and SSP Group

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

The idea behind SALESFORCE INC CDR and SSP Group PLC 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.