Correlation Between Salesforce and Rithm Capital

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

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

Diversification Opportunities for Salesforce and Rithm Capital

-0.78

Correlation Coefficient

Salesforce  Rithm Capital

Pay attention - limited upside

The 3 months correlation between Salesforce and Rithm is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Rithm Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rithm Capital Corp 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 Rithm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rithm Capital Corp has no effect on the direction of Salesforce i.e., Salesforce and Rithm Capital go up and down completely randomly.

Pair Corralation between Salesforce and Rithm Capital

Considering the 90-day investment horizon Salesforce is expected to under-perform the Rithm Capital. In addition to that, Salesforce is 7.22 times more volatile than Rithm Capital Corp. It trades about -0.18 of its total potential returns per unit of risk. Rithm Capital Corp is currently generating about 0.16 per unit of volatility. If you would invest  2,430  in Rithm Capital Corp on December 30, 2024 and sell it today you would earn a total of  62.00  from holding Rithm Capital Corp or generate 2.55% return on investment over 90 days.

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

Salesforce  vs.  Rithm Capital Corp

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.

Rithm Capital Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rithm Capital Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound fundamental indicators, Rithm Capital is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Salesforce and Rithm Capital

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

The idea behind Salesforce and Rithm Capital Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.