Correlation Between Salesforce and AGEDB Technology

Can any of the company-specific risk be diversified away by investing in both Salesforce and AGEDB Technology 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 AGEDB Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Salesforce and AGEDB Technology, you can compare the effects of market volatilities on Salesforce and AGEDB Technology 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 AGEDB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and AGEDB Technology.

Diversification Opportunities for Salesforce and AGEDB Technology

0.69

Correlation Coefficient

Salesforce  AGEDB Technology

Poor diversification

The 3 months correlation between Salesforce and AGEDB is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and AGEDB Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGEDB Technology 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 AGEDB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGEDB Technology has no effect on the direction of Salesforce i.e., Salesforce and AGEDB Technology go up and down completely randomly.

Pair Corralation between Salesforce and AGEDB Technology

Considering the 90-day investment horizon Salesforce is expected to under-perform the AGEDB Technology. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 16.97 times less risky than AGEDB Technology. The stock trades about -0.18 of its potential returns per unit of risk. The AGEDB Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  15.00  in AGEDB Technology on December 22, 2024 and sell it today you would lose (7.00) from holding AGEDB Technology or give up 46.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Salesforce  vs.  AGEDB Technology

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

AGEDB Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AGEDB Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, AGEDB Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and AGEDB Technology

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

The idea behind Salesforce and AGEDB Technology 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 the Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.