Correlation Between Salesforce and New York

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

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

Diversification Opportunities for Salesforce and New York

0.45

Correlation Coefficient

Salesforce  New York

Very weak diversification

The 3 months correlation between Salesforce and New is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and New York Mortgage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New York Mortgage 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 New York. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New York Mortgage has no effect on the direction of Salesforce i.e., Salesforce and New York go up and down completely randomly.

Pair Corralation between Salesforce and New York

Considering the 90-day investment horizon Salesforce is expected to under-perform the New York. In addition to that, Salesforce is 5.09 times more volatile than New York Mortgage. It trades about -0.16 of its total potential returns per unit of risk. New York Mortgage is currently generating about -0.01 per unit of volatility. If you would invest  2,475  in New York Mortgage on December 29, 2024 and sell it today you would lose (8.00) from holding New York Mortgage or give up 0.32% of portfolio value over 90 days.

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

Salesforce  vs.  New York Mortgage

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.

New York Mortgage

Risk-Adjusted Performance

Very Weak

Over the last 90 days New York Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, New York is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and New York

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

The idea behind Salesforce and New York Mortgage 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.