Correlation Between Salesforce and TuanChe

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

Diversification Opportunities for Salesforce and TuanChe

-0.27
  Correlation Coefficient

Very good diversification

The 24 months correlation between Salesforce and TuanChe is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and TuanChe Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TuanChe Limited 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 TuanChe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TuanChe Limited has no effect on the direction of Salesforce i.e., Salesforce and TuanChe go up and down completely randomly.

Pair Corralation between Salesforce and TuanChe

Considering the 90-day investment horizon Salesforce is expected to generate 0.36 times more return on investment than TuanChe. However, Salesforce is 2.8 times less risky than TuanChe. It trades about 0.01 of its potential returns per unit of risk. TuanChe Limited is currently generating about 0.0 per unit of risk. If you would invest  19,772  in Salesforce on March 27, 2022 and sell it today you would lose (1,180)  from holding Salesforce or give up 5.97% of portfolio value over 90 days.
Time Period24 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Salesforce  vs.  TuanChe Limited

 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 relatively steady basic indicators, Salesforce is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Structure and Payout Changes

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

Salesforce Price Channel

TuanChe Limited 
TuanChe Performance
0 of 100
Over the last 90 days TuanChe Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, TuanChe is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Structure and Payout Changes

Last Split Factor
1:4
Dividend Date
2020-10-22
Last Split Date
2020-10-22

TuanChe Price Channel

Salesforce and TuanChe Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Salesforce and TuanChe

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

Salesforce

Pair trading matchups for Salesforce

The idea behind Salesforce and TuanChe Limited 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.

TuanChe Limited

Pair trading matchups for TuanChe

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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