Correlation Between Salesforce and Snipp Interactive

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

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

Diversification Opportunities for Salesforce and Snipp Interactive

0.73

Correlation Coefficient

Salesforce  Snipp Interactive

Poor diversification

The 3 months correlation between Salesforce and Snipp is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Snipp Interactive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Snipp Interactive 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 Snipp Interactive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Snipp Interactive has no effect on the direction of Salesforce i.e., Salesforce and Snipp Interactive go up and down completely randomly.

Pair Corralation between Salesforce and Snipp Interactive

Considering the 90-day investment horizon Salesforce is expected to under-perform the Snipp Interactive. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.06 times less risky than Snipp Interactive. The stock trades about -0.03 of its potential returns per unit of risk. The Snipp Interactive is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  5.40  in Snipp Interactive on February 23, 2025 and sell it today you would earn a total of  0.40  from holding Snipp Interactive or generate 7.41% return on investment over 90 days.

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

Salesforce  vs.  Snipp Interactive

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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.

Snipp Interactive

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Salesforce and Snipp Interactive

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

The idea behind Salesforce and Snipp Interactive 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.