Correlation Between Salesforce and Autozone

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

Diversification Opportunities for Salesforce and Autozone

0.31
  Correlation Coefficient

Weak diversification

The 3 months correlation between Salesforce and Autozone is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Autozone in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autozone 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 Autozone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autozone has no effect on the direction of Salesforce i.e., Salesforce and Autozone go up and down completely randomly.

Pair Corralation between Salesforce and Autozone

Considering the 90-day investment horizon Salesforce is expected to generate 3.14 times more return on investment than Autozone. However, Salesforce is 3.14 times more volatile than Autozone. It trades about 0.18 of its potential returns per unit of risk. Autozone is currently generating about 0.23 per unit of risk. If you would invest  16,246  in Salesforce on March 27, 2022 and sell it today you would earn a total of  2,346  from holding Salesforce or generate 14.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  Autozone

 Performance (%) 
      Timeline 
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 latest weak performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Structure and Payout Changes

Last Split Factor
4:1
Last Split Date
2013-04-18

Salesforce Price Channel

Autozone 
Autozone Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Autozone are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Autozone may actually be approaching a critical reversion point that can send shares even higher in July 2022.

Structure and Payout Changes

Last Split Factor
2:1
Last Split Date
1994-04-21

Autozone Price Channel

Salesforce and Autozone Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Salesforce and Autozone

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

Salesforce

Pair trading matchups for Salesforce

The idea behind Salesforce and Autozone 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.

Autozone

Pair trading matchups for Autozone

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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