Correlation Between Salesforce and Epsilon Energy

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

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

Diversification Opportunities for Salesforce and Epsilon Energy

0.24

Correlation Coefficient

Salesforce  Epsilon Energy

Modest diversification

The 3 months correlation between Salesforce and Epsilon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Epsilon Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Epsilon Energy 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 Epsilon Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Epsilon Energy has no effect on the direction of Salesforce i.e., Salesforce and Epsilon Energy go up and down completely randomly.

Pair Corralation between Salesforce and Epsilon Energy

Considering the 90-day investment horizon Salesforce is expected to generate 0.72 times more return on investment than Epsilon Energy. However, Salesforce is 1.4 times less risky than Epsilon Energy. It trades about -0.03 of its potential returns per unit of risk. Epsilon Energy is currently generating about -0.11 per unit of risk. If you would invest  26,978  in Salesforce on July 27, 2025 and sell it today you would lose (1,495) from holding Salesforce or give up 5.54% of portfolio value over 90 days.

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

Salesforce  vs.  Epsilon Energy

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

Epsilon Energy

Risk-Adjusted Performance

Weakest

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

Pair Trading with Salesforce and Epsilon Energy

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

The idea behind Salesforce and Epsilon Energy 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.