Correlation Between Salesforce and MicroSectors FANG

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

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

Diversification Opportunities for Salesforce and MicroSectors FANG

0.1

Correlation Coefficient

Salesforce  MicroSectors FANG

Average diversification

The 3 months correlation between Salesforce and MicroSectors is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and MicroSectors FANG Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroSectors FANG Index 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 MicroSectors FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroSectors FANG Index has no effect on the direction of Salesforce i.e., Salesforce and MicroSectors FANG go up and down completely randomly.

Pair Corralation between Salesforce and MicroSectors FANG

Considering the 90-day investment horizon Salesforce is expected to generate 2.54 times more return on investment than MicroSectors FANG. However, Salesforce is 2.54 times more volatile than MicroSectors FANG Index. It trades about -0.03 of its potential returns per unit of risk. MicroSectors FANG Index is currently generating about -0.26 per unit of risk. If you would invest  27,464  in Salesforce on May 2, 2025 and sell it today you would lose (983.00) from holding Salesforce or give up 3.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	22.95%
Values	Daily Returns

Salesforce  vs.  MicroSectors FANG Index

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.

MicroSectors FANG Index

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroSectors FANG Index has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest conflicting performance, the Etf's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Salesforce and MicroSectors FANG

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

The idea behind Salesforce and MicroSectors FANG Index 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.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.