Correlation Between Salesforce and IShares High

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

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

Diversification Opportunities for Salesforce and IShares High

-0.54

Correlation Coefficient

Salesforce  IShares High

Excellent diversification

The 3 months correlation between Salesforce and IShares is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and iShares High Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares High Quality 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 IShares High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares High Quality has no effect on the direction of Salesforce i.e., Salesforce and IShares High go up and down completely randomly.

Pair Corralation between Salesforce and IShares High

Considering the 90-day investment horizon Salesforce is expected to under-perform the IShares High. In addition to that, Salesforce is 5.45 times more volatile than iShares High Quality. It trades about -0.18 of its total potential returns per unit of risk. iShares High Quality is currently generating about 0.09 per unit of volatility. If you would invest  1,886  in iShares High Quality on December 30, 2024 and sell it today you would earn a total of  38.00  from holding iShares High Quality or generate 2.01% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Salesforce  vs.  iShares High Quality

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.

iShares High Quality

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in iShares High Quality are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental drivers, IShares High 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 IShares High

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

The idea behind Salesforce and iShares High Quality 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.