Correlation Between Oculus VisionTech and Salesforce

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

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

Diversification Opportunities for Oculus VisionTech and Salesforce

0.74

Correlation Coefficient

Oculus VisionTech  Salesforce

Poor diversification

The 3 months correlation between Oculus and Salesforce is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Oculus VisionTech and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR and Oculus VisionTech 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 Oculus VisionTech 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 Oculus VisionTech i.e., Oculus VisionTech and Salesforce go up and down completely randomly.

Pair Corralation between Oculus VisionTech and Salesforce

Assuming the 90 days horizon Oculus VisionTech is expected to generate 4.12 times more return on investment than Salesforce. However, Oculus VisionTech is 4.12 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 0.1 per unit of risk. If you would invest  17.00  in Oculus VisionTech on September 24, 2024 and sell it today you would lose (8.75) from holding Oculus VisionTech or give up 51.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Oculus VisionTech  vs.  SalesforceCom CDR

Oculus VisionTech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Oculus VisionTech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Oculus VisionTech showed solid returns over the last few months and may actually be approaching a breakup point.

SalesforceCom CDR

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SalesforceCom CDR are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Oculus VisionTech and Salesforce

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

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.