Correlation Between Salesforce and CEMATRIX

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

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

Diversification Opportunities for Salesforce and CEMATRIX

-0.66

Correlation Coefficient

Salesforce  CEMATRIX

Excellent diversification

The 3 months correlation between Salesforce and CEMATRIX is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX 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 CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Salesforce i.e., Salesforce and CEMATRIX go up and down completely randomly.

Pair Corralation between Salesforce and CEMATRIX

Considering the 90-day investment horizon Salesforce is expected to under-perform the CEMATRIX. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.89 times less risky than CEMATRIX. The stock trades about -0.08 of its potential returns per unit of risk. The CEMATRIX is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  18.00  in CEMATRIX on May 4, 2025 and sell it today you would earn a total of  5.00  from holding CEMATRIX or generate 27.78% return on investment over 90 days.

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

Salesforce  vs.  CEMATRIX

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 latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

CEMATRIX

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CEMATRIX are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, CEMATRIX reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and CEMATRIX

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

The idea behind Salesforce and CEMATRIX 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.