Correlation Between SALESFORCE INC and China Shenhua
Can any of the company-specific risk be diversified away by investing in both SALESFORCE INC and China Shenhua 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 INC and China Shenhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SALESFORCE INC CDR and China Shenhua Energy, you can compare the effects of market volatilities on SALESFORCE INC and China Shenhua 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 INC with a short position of China Shenhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and China Shenhua.
Diversification Opportunities for SALESFORCE INC and China Shenhua
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between SALESFORCE and China is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and China Shenhua Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Shenhua Energy and SALESFORCE INC 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 INC CDR are associated (or correlated) with China Shenhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Shenhua Energy has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and China Shenhua go up and down completely randomly.
Pair Corralation between SALESFORCE INC and China Shenhua
Assuming the 90 days trading horizon SALESFORCE INC is expected to generate 1.52 times less return on investment than China Shenhua. But when comparing it to its historical volatility, SALESFORCE INC CDR is 1.83 times less risky than China Shenhua. It trades about 0.08 of its potential returns per unit of risk. China Shenhua Energy is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 126.00 in China Shenhua Energy on September 26, 2024 and sell it today you would earn a total of 261.00 from holding China Shenhua Energy or generate 207.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SALESFORCE INC CDR vs. China Shenhua Energy
Performance |
Timeline |
SALESFORCE INC CDR |
China Shenhua Energy |
SALESFORCE INC and China Shenhua Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SALESFORCE INC and China Shenhua
The main advantage of trading using opposite SALESFORCE INC and China Shenhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SALESFORCE INC position performs unexpectedly, China Shenhua 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 China Shenhua will offset losses from the drop in China Shenhua's long position.SALESFORCE INC vs. SAP SE | SALESFORCE INC vs. Nemetschek AG ON | SALESFORCE INC vs. Workiva | SALESFORCE INC vs. TeamViewer AG |
China Shenhua vs. Spirent Communications plc | China Shenhua vs. CPU SOFTWAREHOUSE | China Shenhua vs. VITEC SOFTWARE GROUP | China Shenhua vs. Entravision Communications |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Bonds Directory Find actively traded corporate debentures issued by US companies | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |