Correlation Between Accenture Plc and Salesforce

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Can any of the company-specific risk be diversified away by investing in both Accenture Plc 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 Accenture Plc and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Accenture Plc and Salesforce, you can compare the effects of market volatilities on Accenture Plc 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 Accenture Plc with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Accenture Plc and Salesforce.

Diversification Opportunities for Accenture Plc and Salesforce

0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Accenture and Salesforce is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Accenture Plc and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Accenture Plc 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 Accenture Plc 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 Salesforce has no effect on the direction of Accenture Plc i.e., Accenture Plc and Salesforce go up and down completely randomly.

Pair Corralation between Accenture Plc and Salesforce

Considering the 90-day investment horizon Accenture Plc is expected to generate 0.56 times more return on investment than Salesforce. However, Accenture Plc is 1.79 times less risky than Salesforce. It trades about 0.35 of its potential returns per unit of risk. Salesforce is currently generating about 0.0 per unit of risk. If you would invest  25,688  in Accenture Plc on September 4, 2022 and sell it today you would earn a total of  4,325  from holding Accenture Plc or generate 16.84% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Accenture Plc  vs.  Salesforce

 Performance (%) 
       Timeline  
Accenture Plc 
Accenture Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Accenture Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental indicators, Accenture Plc may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Accenture Price Channel

Salesforce 
Salesforce Performance
0 of 100
Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Salesforce is not utilizing all of its potentials. The newest stock price chaos, may contribute to medium-term losses for the stakeholders.

Salesforce Price Channel

Accenture Plc and Salesforce Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Accenture Plc and Salesforce

The main advantage of trading using opposite Accenture Plc and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Accenture Plc 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.
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The idea behind Accenture Plc and Salesforce 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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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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