Correlation Between Salesforce and GameSquare Holdings

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

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

Diversification Opportunities for Salesforce and GameSquare Holdings

0.71

Correlation Coefficient

Salesforce  GameSquare Holdings

Poor diversification

The 3 months correlation between Salesforce and GameSquare is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and GameSquare Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GameSquare Holdings 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 GameSquare Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GameSquare Holdings has no effect on the direction of Salesforce i.e., Salesforce and GameSquare Holdings go up and down completely randomly.

Pair Corralation between Salesforce and GameSquare Holdings

Considering the 90-day investment horizon Salesforce is expected to generate 0.35 times more return on investment than GameSquare Holdings. However, Salesforce is 2.84 times less risky than GameSquare Holdings. It trades about -0.18 of its potential returns per unit of risk. GameSquare Holdings is currently generating about -0.06 per unit of risk. If you would invest  33,433  in Salesforce on December 31, 2024 and sell it today you would lose (6,436) from holding Salesforce or give up 19.25% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Salesforce  vs.  GameSquare Holdings

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 May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

GameSquare Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days GameSquare Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's primary indicators remain rather sound which may send shares a bit higher in May 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Salesforce and GameSquare Holdings

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

The idea behind Salesforce and GameSquare Holdings 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.

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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 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.