Correlation Between Salesforce and Thai Union
Can any of the company-specific risk be diversified away by investing in both Salesforce and Thai Union 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 Thai Union into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Thai Union Group, you can compare the effects of market volatilities on Salesforce and Thai Union 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 Thai Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Thai Union.
Diversification Opportunities for Salesforce and Thai Union
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Salesforce and Thai is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Thai Union Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thai Union Group 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 Thai Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thai Union Group has no effect on the direction of Salesforce i.e., Salesforce and Thai Union go up and down completely randomly.
Pair Corralation between Salesforce and Thai Union
Considering the 90-day investment horizon Salesforce is expected to generate 1.6 times more return on investment than Thai Union. However, Salesforce is 1.6 times more volatile than Thai Union Group. It trades about 0.06 of its potential returns per unit of risk. Thai Union Group is currently generating about 0.0 per unit of risk. If you would invest 16,339 in Salesforce on January 27, 2024 and sell it today you would earn a total of 10,975 from holding Salesforce or generate 67.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 97.17% |
Values | Daily Returns |
Salesforce vs. Thai Union Group
Performance |
Timeline |
Salesforce |
Thai Union Group |
Salesforce and Thai Union Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Salesforce and Thai Union
The main advantage of trading using opposite Salesforce and Thai Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Thai Union 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 Thai Union will offset losses from the drop in Thai Union's long position.The idea behind Salesforce and Thai Union Group 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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