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 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

-0.3

Correlation Coefficient

Salesforce  Biogen

Very good diversification

The 3 months correlation between Salesforce and Biogen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce 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 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

Considering the 90-day investment horizon Salesforce is expected to under-perform the Biogen. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.73 times less risky than Biogen. The stock trades about -0.19 of its potential returns per unit of risk. The Biogen Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  13,007  in Biogen Inc on May 2, 2025 and sell it today you would lose (207.00) from holding Biogen Inc or give up 1.59% of portfolio value over 90 days.

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

Salesforce  vs.  Biogen Inc

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.

Biogen Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Biogen Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Biogen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.