Correlation Between HOME DEPOT and Salesforce
Can any of the company-specific risk be diversified away by investing in both HOME DEPOT 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 HOME DEPOT and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOME DEPOT CDR and SalesforceCom CDR, you can compare the effects of market volatilities on HOME DEPOT 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 HOME DEPOT with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Salesforce.
Diversification Opportunities for HOME DEPOT and Salesforce
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between HOME and Salesforce is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR and HOME DEPOT 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 HOME DEPOT CDR 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 HOME DEPOT i.e., HOME DEPOT and Salesforce go up and down completely randomly.
Pair Corralation between HOME DEPOT and Salesforce
Assuming the 90 days trading horizon HOME DEPOT CDR is expected to generate 0.8 times more return on investment than Salesforce. However, HOME DEPOT CDR is 1.26 times less risky than Salesforce. It trades about 0.05 of its potential returns per unit of risk. SalesforceCom CDR is currently generating about 0.0 per unit of risk. If you would invest 2,283 in HOME DEPOT CDR on April 24, 2025 and sell it today you would earn a total of 73.00 from holding HOME DEPOT CDR or generate 3.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
HOME DEPOT CDR vs. SalesforceCom CDR
Performance |
Timeline |
HOME DEPOT CDR |
SalesforceCom CDR |
HOME DEPOT and Salesforce Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HOME DEPOT and Salesforce
The main advantage of trading using opposite HOME DEPOT and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOME DEPOT 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.HOME DEPOT vs. Big Rock Brewery | HOME DEPOT vs. Aya Gold Silver | HOME DEPOT vs. Aris Mining | HOME DEPOT vs. HPQ Silicon Resources |
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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