Correlation Between Salesforce and Alexanders

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

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

Diversification Opportunities for Salesforce and Alexanders

-0.39

Correlation Coefficient

Salesforce  Alexanders

Very good diversification

The 3 months correlation between Salesforce and Alexanders is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Alexanders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexanders 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 Alexanders. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexanders has no effect on the direction of Salesforce i.e., Salesforce and Alexanders go up and down completely randomly.

Pair Corralation between Salesforce and Alexanders

Considering the 90-day investment horizon Salesforce is expected to under-perform the Alexanders. In addition to that, Salesforce is 1.11 times more volatile than Alexanders. It trades about -0.06 of its total potential returns per unit of risk. Alexanders is currently generating about 0.22 per unit of volatility. If you would invest  21,028  in Alexanders on May 2, 2025 and sell it today you would earn a total of  4,091  from holding Alexanders or generate 19.46% return on investment over 90 days.

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

Salesforce  vs.  Alexanders

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 very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Alexanders

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Alexanders are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Alexanders showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Alexanders

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

The idea behind Salesforce and Alexanders 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.