Correlation Between Elevance Health, and Salesforce

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

By analyzing existing cross correlation between Elevance Health, and salesforce inc, you can compare the effects of market volatilities on Elevance Health, and Salesforce 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 Elevance Health, with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elevance Health, and Salesforce.

Diversification Opportunities for Elevance Health, and Salesforce

0.76

Correlation Coefficient

Elevance Health,  Salesforce

Poor diversification

The 3 months correlation between Elevance and Salesforce is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Elevance Health, and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc and Elevance Health, 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 Elevance Health, are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of salesforce inc has no effect on the direction of Elevance Health, i.e., Elevance Health, and Salesforce go up and down completely randomly.

Pair Corralation between Elevance Health, and Salesforce

Assuming the 90 days trading horizon Elevance Health, is expected to generate 0.87 times more return on investment than Salesforce. However, Elevance Health, is 1.14 times less risky than Salesforce. It trades about 0.04 of its potential returns per unit of risk. salesforce inc is currently generating about -0.18 per unit of risk. If you would invest  47,095  in Elevance Health, on December 27, 2024 and sell it today you would earn a total of  1,914  from holding Elevance Health, or generate 4.06% return on investment over 90 days.

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

Elevance Health,  vs.  salesforce inc

Elevance Health,

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elevance Health, are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong essential indicators, Elevance Health, is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

salesforce inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days salesforce inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Elevance Health, and Salesforce

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

The idea behind Elevance Health, and salesforce inc 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.

Check out your portfolio center.

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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.