Correlation Between Kraft Heinz and Salesforce

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

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

Diversification Opportunities for Kraft Heinz and Salesforce

-0.34

Correlation Coefficient

Kraft Heinz  Salesforce

Very good diversification

The 3 months correlation between Kraft and Salesforce is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding The Kraft Heinz and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc and Kraft Heinz 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 The Kraft Heinz 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 Kraft Heinz i.e., Kraft Heinz and Salesforce go up and down completely randomly.

Pair Corralation between Kraft Heinz and Salesforce

Assuming the 90 days trading horizon Kraft Heinz is expected to generate 4.95 times less return on investment than Salesforce. But when comparing it to its historical volatility, The Kraft Heinz is 1.29 times less risky than Salesforce. It trades about 0.04 of its potential returns per unit of risk. salesforce inc is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  6,568  in salesforce inc on September 29, 2024 and sell it today you would earn a total of  2,940  from holding salesforce inc or generate 44.76% return on investment over 90 days.

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

The Kraft Heinz  vs.  salesforce inc

Kraft Heinz

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Kraft Heinz has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, Kraft Heinz is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

salesforce inc

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in salesforce inc are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Salesforce sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kraft Heinz and Salesforce

The main advantage of trading using opposite Kraft Heinz and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kraft Heinz 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 The Kraft Heinz 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.

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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.