Correlation Between Salesforce and Eaton Vance

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

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

Diversification Opportunities for Salesforce and Eaton Vance

0.55

Correlation Coefficient

Salesforce  Eaton Vance

Very weak diversification

The 3 months correlation between Salesforce and Eaton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Eaton Vance Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Special 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Special has no effect on the direction of Salesforce i.e., Salesforce and Eaton Vance go up and down completely randomly.

Pair Corralation between Salesforce and Eaton Vance

If you would invest  24,767  in Salesforce on September 2, 2024 and sell it today you would earn a total of  8,232  from holding Salesforce or generate 33.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Salesforce  vs.  Eaton Vance Special

Salesforce

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Eaton Vance Special

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Special has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Eaton Vance is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Eaton Vance

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

The idea behind Salesforce and Eaton Vance Special 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.