Correlation Between Cootek Cayman and Salesforce

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

Diversification Opportunities for Cootek Cayman and Salesforce

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Cootek and Salesforce is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cootek Cayman Inc and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Cootek Cayman 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 Cootek Cayman 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 Cootek Cayman i.e., Cootek Cayman and Salesforce go up and down completely randomly.

Pair Corralation between Cootek Cayman and Salesforce

Considering the 90-day investment horizon Cootek Cayman is expected to generate 14.73 times more return on investment than Salesforce. However, Cootek Cayman is 14.73 times more volatile than Salesforce. It trades about 0.23 of its potential returns per unit of risk. Salesforce is currently generating about -0.07 per unit of risk. If you would invest  38.00  in Cootek Cayman on April 8, 2022 and sell it today you would earn a total of  53.00  from holding Cootek Cayman or generate 139.47% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

Cootek Cayman Inc  vs.  Salesforce

 Performance (%) 
      Timeline 
Cootek Cayman 
Cootek Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Cootek Cayman are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Cootek Cayman demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Structure and Payout Changes

Last Split Factor
1:13
Last Split Date
2022-05-09

Cootek 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 latest unsteady 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

Cootek Cayman and Salesforce Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Cootek Cayman and Salesforce

The main advantage of trading using opposite Cootek Cayman and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cootek Cayman 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.

Cootek Cayman

Pair trading matchups for Cootek Cayman

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The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Cootek Cayman as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Cootek Cayman's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Cootek Cayman's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Cootek Cayman.
The idea behind Cootek Cayman 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.
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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