Correlation Between Walmart and Salesforce

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

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

Diversification Opportunities for Walmart and Salesforce

0.71

Correlation Coefficient

Walmart  Salesforce

Poor diversification

The 3 months correlation between Walmart and Salesforce is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Walmart and salesforce inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on salesforce inc and Walmart 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 Walmart 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 Walmart i.e., Walmart and Salesforce go up and down completely randomly.

Pair Corralation between Walmart and Salesforce

Assuming the 90 days trading horizon Walmart is expected to generate 0.81 times more return on investment than Salesforce. However, Walmart is 1.24 times less risky than Salesforce. It trades about -0.14 of its potential returns per unit of risk. salesforce inc is currently generating about -0.17 per unit of risk. If you would invest  3,578  in Walmart on December 26, 2024 and sell it today you would lose (565.00) from holding Walmart or give up 15.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

Walmart  vs.  salesforce inc

Walmart

Risk-Adjusted Performance

Very Weak

Over the last 90 days Walmart 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 essential 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.

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.

Pair Trading with Walmart and Salesforce

The main advantage of trading using opposite Walmart and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walmart 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 Walmart 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.