Correlation Between TrustBIX and Salesforce

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

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

Diversification Opportunities for TrustBIX and Salesforce

0.32

Correlation Coefficient

TrustBIX  Salesforce

Weak diversification

The 3 months correlation between TrustBIX and Salesforce is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding TrustBIX and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and TrustBIX 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 TrustBIX 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 has no effect on the direction of TrustBIX i.e., TrustBIX and Salesforce go up and down completely randomly.

Pair Corralation between TrustBIX and Salesforce

Assuming the 90 days horizon TrustBIX is expected to generate 8.18 times more return on investment than Salesforce. However, TrustBIX is 8.18 times more volatile than Salesforce. It trades about 0.04 of its potential returns per unit of risk. Salesforce is currently generating about -0.16 per unit of risk. If you would invest  3.95  in TrustBIX on December 28, 2024 and sell it today you would lose (2.18) from holding TrustBIX or give up 55.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.24%
Values	Daily Returns

TrustBIX  vs.  Salesforce

TrustBIX

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TrustBIX are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, TrustBIX reported solid returns over the last few months and may actually be approaching a breakup point.

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 conflicting 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.

Pair Trading with TrustBIX and Salesforce

The main advantage of trading using opposite TrustBIX and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TrustBIX 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 TrustBIX and Salesforce 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.