Correlation Between Salesforce and Tanger Factory

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

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

Diversification Opportunities for Salesforce and Tanger Factory

0.09

Correlation Coefficient

Salesforce  Tanger Factory

Significant diversification

The 3 months correlation between Salesforce and Tanger is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Tanger Factory Outlet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tanger Factory Outlet 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 Tanger Factory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tanger Factory Outlet has no effect on the direction of Salesforce i.e., Salesforce and Tanger Factory go up and down completely randomly.

Pair Corralation between Salesforce and Tanger Factory

Considering the 90-day investment horizon Salesforce is expected to under-perform the Tanger Factory. In addition to that, Salesforce is 1.14 times more volatile than Tanger Factory Outlet. It trades about -0.16 of its total potential returns per unit of risk. Tanger Factory Outlet is currently generating about -0.02 per unit of volatility. If you would invest  3,362  in Tanger Factory Outlet on December 29, 2024 and sell it today you would lose (76.00) from holding Tanger Factory Outlet or give up 2.26% of portfolio value over 90 days.

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

Salesforce  vs.  Tanger Factory Outlet

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.

Tanger Factory Outlet

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tanger Factory Outlet has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Tanger Factory is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Tanger Factory

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

The idea behind Salesforce and Tanger Factory Outlet 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.