Correlation Between Salesforce and Biogen

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

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

Diversification Opportunities for Salesforce and Biogen

0.55

Correlation Coefficient

Salesforce  Biogen

Very weak diversification

The 3 months correlation between Salesforce and Biogen is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding salesforce inc and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc 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 inc are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Salesforce i.e., Salesforce and Biogen go up and down completely randomly.

Pair Corralation between Salesforce and Biogen

Assuming the 90 days trading horizon salesforce inc is expected to under-perform the Biogen. In addition to that, Salesforce is 1.19 times more volatile than Biogen Inc. It trades about -0.17 of its total potential returns per unit of risk. Biogen Inc is currently generating about -0.09 per unit of volatility. If you would invest  15,270  in Biogen Inc on December 26, 2024 and sell it today you would lose (1,760) from holding Biogen Inc or give up 11.53% of portfolio value over 90 days.

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

salesforce inc  vs.  Biogen Inc

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 weak 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.

Biogen Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Biogen Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Salesforce and Biogen

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

The idea behind salesforce inc and Biogen 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.