Correlation Between Salesforce and OFS Credit

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

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

Diversification Opportunities for Salesforce and OFS Credit

0.18

Correlation Coefficient

Salesforce  OFS Credit

Average diversification

The 3 months correlation between Salesforce and OFS is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Salesforce i.e., Salesforce and OFS Credit go up and down completely randomly.

Pair Corralation between Salesforce and OFS Credit

Considering the 90-day investment horizon Salesforce is expected to under-perform the OFS Credit. In addition to that, Salesforce is 1.78 times more volatile than OFS Credit. It trades about -0.18 of its total potential returns per unit of risk. OFS Credit is currently generating about -0.12 per unit of volatility. If you would invest  671.00  in OFS Credit on December 28, 2024 and sell it today you would lose (52.00) from holding OFS Credit or give up 7.75% of portfolio value over 90 days.

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

Salesforce  vs.  OFS Credit

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 conflicting 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.

OFS Credit

Risk-Adjusted Performance

Very Weak

Over the last 90 days OFS Credit has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Salesforce and OFS Credit

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

The idea behind Salesforce and OFS Credit 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.