Correlation Between Salesforce and Fresenius

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

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

Diversification Opportunities for Salesforce and Fresenius

-0.75

Correlation Coefficient

Salesforce  Fresenius

Pay attention - limited upside

The 3 months correlation between Salesforce and Fresenius is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Fresenius SE Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresenius SE 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 Fresenius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresenius SE has no effect on the direction of Salesforce i.e., Salesforce and Fresenius go up and down completely randomly.

Pair Corralation between Salesforce and Fresenius

Considering the 90-day investment horizon Salesforce is expected to under-perform the Fresenius. In addition to that, Salesforce is 1.24 times more volatile than Fresenius SE Co. It trades about -0.16 of its total potential returns per unit of risk. Fresenius SE Co is currently generating about 0.2 per unit of volatility. If you would invest  3,348  in Fresenius SE Co on December 24, 2024 and sell it today you would earn a total of  619.00  from holding Fresenius SE Co or generate 18.49% return on investment over 90 days.

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

Salesforce  vs.  Fresenius SE Co

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.

Fresenius SE

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Fresenius SE Co are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Fresenius unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Fresenius

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

The idea behind Salesforce and Fresenius SE Co 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.