Correlation Between Salesforce and Nestle SA
Can any of the company-specific risk be diversified away by investing in both Salesforce and Nestle SA 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 Nestle SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Nestle SA, you can compare the effects of market volatilities on Salesforce and Nestle SA 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 Nestle SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Nestle SA.
Diversification Opportunities for Salesforce and Nestle SA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Nestle is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Nestle SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nestle SA 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 Nestle SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nestle SA has no effect on the direction of Salesforce i.e., Salesforce and Nestle SA go up and down completely randomly.
Pair Corralation between Salesforce and Nestle SA
Considering the 90-day investment horizon Salesforce is expected to generate 1.42 times more return on investment than Nestle SA. However, Salesforce is 1.42 times more volatile than Nestle SA. It trades about 0.02 of its potential returns per unit of risk. Nestle SA is currently generating about -0.07 per unit of risk. If you would invest 26,690 in Salesforce on January 20, 2024 and sell it today you would earn a total of 347.00 from holding Salesforce or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Nestle SA
Performance |
| Timeline |
| Salesforce |
| Nestle SA |
Salesforce and Nestle SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Nestle SA
The main advantage of trading using opposite Salesforce and Nestle SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Nestle SA 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 Nestle SA will offset losses from the drop in Nestle SA's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Nestle SA vs. Kellanova | Nestle SA vs. Lancaster Colony | Nestle SA vs. The A2 Milk | Nestle SA vs. Artisan Consumer Goods |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |