Correlation Between East Side and Salesforce

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

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

Diversification Opportunities for East Side and Salesforce

-0.68

Correlation Coefficient

East Side  Salesforce

Excellent diversification

The 3 months correlation between East and Salesforce is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding East Side Games and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR and East Side 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 East Side Games 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 East Side i.e., East Side and Salesforce go up and down completely randomly.

Pair Corralation between East Side and Salesforce

Assuming the 90 days trading horizon East Side Games is expected to under-perform the Salesforce. In addition to that, East Side is 1.73 times more volatile than SalesforceCom CDR. It trades about -0.06 of its total potential returns per unit of risk. SalesforceCom CDR is currently generating about 0.07 per unit of volatility. If you would invest  2,724  in SalesforceCom CDR on September 13, 2024 and sell it today you would earn a total of  104.00  from holding SalesforceCom CDR or generate 3.82% return on investment over 90 days.

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

East Side Games  vs.  SalesforceCom CDR

East Side Games

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days East Side Games has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

SalesforceCom CDR

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SalesforceCom CDR 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 East Side and Salesforce

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

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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.