Correlation Between SponsorsOne and Salesforce

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

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

Diversification Opportunities for SponsorsOne and Salesforce

0.0

Correlation Coefficient

SponsorsOne  Salesforce

Pay attention - limited upside

The 3 months correlation between SponsorsOne and Salesforce is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SponsorsOne and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and SponsorsOne 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 SponsorsOne 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 has no effect on the direction of SponsorsOne i.e., SponsorsOne and Salesforce go up and down completely randomly.

Pair Corralation between SponsorsOne and Salesforce

If you would invest  25,417  in Salesforce on September 13, 2024 and sell it today you would earn a total of  10,068  from holding Salesforce or generate 39.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

SponsorsOne  vs.  Salesforce

SponsorsOne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SponsorsOne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SponsorsOne is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Salesforce

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 19 (%) 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 SponsorsOne and Salesforce

The main advantage of trading using opposite SponsorsOne and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SponsorsOne 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 SponsorsOne and Salesforce 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.