Correlation Between Salesforce and Bancor Network

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

Diversification Opportunities for Salesforce and Bancor Network

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Salesforce and Bancor is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Bancor Network Token in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bancor Network Token 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 Bancor Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bancor Network Token has no effect on the direction of Salesforce i.e., Salesforce and Bancor Network go up and down completely randomly.

Pair Corralation between Salesforce and Bancor Network

Considering the 90-day investment horizon Salesforce is expected to under-perform the Bancor Network. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.26 times less risky than Bancor Network. The stock trades about -0.13 of its potential returns per unit of risk. The Bancor Network Token is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  45.00  in Bancor Network Token on June 30, 2022 and sell it today you would earn a total of  2.00  from holding Bancor Network Token or generate 4.44% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy63.64%
ValuesDaily Returns

Salesforce  vs.  Bancor Network Token

 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.

Salesforce Price Channel

Bancor Network Token 
Bancor Performance
0 of 100
Over the last 90 days Bancor Network Token has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak basic indicators, Bancor Network may actually be approaching a critical reversion point that can send shares even higher in October 2022.

Salesforce and Bancor Network Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Salesforce and Bancor Network

The main advantage of trading using opposite Salesforce and Bancor Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Bancor Network 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 Bancor Network will offset losses from the drop in Bancor Network's long position.
Salesforce vs. Uber Technologies
The idea behind Salesforce and Bancor Network Token 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

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