Correlation Between Salesforce and WisdomTree Europe

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

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

Diversification Opportunities for Salesforce and WisdomTree Europe

-0.6

Correlation Coefficient

Salesforce  WisdomTree Europe

Excellent diversification

The 3 months correlation between Salesforce and WisdomTree is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and WisdomTree Europe SmallCap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WisdomTree Europe 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 WisdomTree Europe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WisdomTree Europe has no effect on the direction of Salesforce i.e., Salesforce and WisdomTree Europe go up and down completely randomly.

Pair Corralation between Salesforce and WisdomTree Europe

Considering the 90-day investment horizon Salesforce is expected to under-perform the WisdomTree Europe. In addition to that, Salesforce is 2.18 times more volatile than WisdomTree Europe SmallCap. It trades about -0.21 of its total potential returns per unit of risk. WisdomTree Europe SmallCap is currently generating about 0.16 per unit of volatility. If you would invest  6,618  in WisdomTree Europe SmallCap on May 16, 2025 and sell it today you would earn a total of  457.00  from holding WisdomTree Europe SmallCap or generate 6.91% return on investment over 90 days.

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

Salesforce  vs.  WisdomTree Europe SmallCap

Salesforce

Risk-Adjusted Performance

Weakest

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

WisdomTree Europe

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WisdomTree Europe SmallCap are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, WisdomTree Europe may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Salesforce and WisdomTree Europe

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

The idea behind Salesforce and WisdomTree Europe SmallCap 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.