Correlation Between Salesforce and Direxion Daily

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

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

Diversification Opportunities for Salesforce and Direxion Daily

-0.23

Correlation Coefficient

Salesforce  Direxion Daily

Very good diversification

The 3 months correlation between Salesforce and Direxion is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Direxion Daily CSCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Direxion Daily CSCO 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 Direxion Daily. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Direxion Daily CSCO has no effect on the direction of Salesforce i.e., Salesforce and Direxion Daily go up and down completely randomly.

Pair Corralation between Salesforce and Direxion Daily

Considering the 90-day investment horizon Salesforce is expected to generate 1.74 times more return on investment than Direxion Daily. However, Salesforce is 1.74 times more volatile than Direxion Daily CSCO. It trades about 0.01 of its potential returns per unit of risk. Direxion Daily CSCO is currently generating about -0.03 per unit of risk. If you would invest  26,743  in Salesforce on April 25, 2025 and sell it today you would earn a total of  27.00  from holding Salesforce or generate 0.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	32.26%
Values	Daily Returns

Salesforce  vs.  Direxion Daily CSCO

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.

Direxion Daily CSCO

Risk-Adjusted Performance

Very Weak

Over the last 90 days Direxion Daily CSCO has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental indicators, Direxion Daily is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Salesforce and Direxion Daily

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

The idea behind Salesforce and Direxion Daily CSCO 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.