Correlation Between Salesforce and Onity

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

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

Diversification Opportunities for Salesforce and Onity

0.43

Correlation Coefficient

Salesforce  Onity

Very weak diversification

The 3 months correlation between Salesforce and Onity is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Onity Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Onity Group 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 Onity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Onity Group has no effect on the direction of Salesforce i.e., Salesforce and Onity go up and down completely randomly.

Pair Corralation between Salesforce and Onity

Considering the 90-day investment horizon Salesforce is expected to under-perform the Onity. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.61 times less risky than Onity. The stock trades about -0.18 of its potential returns per unit of risk. The Onity Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  3,044  in Onity Group on December 30, 2024 and sell it today you would earn a total of  101.00  from holding Onity Group or generate 3.32% return on investment over 90 days.

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

Salesforce  vs.  Onity Group

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.

Onity Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Onity Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable forward indicators, Onity is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Onity

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

The idea behind Salesforce and Onity Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.