Correlation Between Salesforce and First Northern

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

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

Diversification Opportunities for Salesforce and First Northern

-0.34

Correlation Coefficient

Salesforce  First Northern

Very good diversification

The 3 months correlation between Salesforce and First is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and First Northern Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northern Community 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 First Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northern Community has no effect on the direction of Salesforce i.e., Salesforce and First Northern go up and down completely randomly.

Pair Corralation between Salesforce and First Northern

Considering the 90-day investment horizon Salesforce is expected to under-perform the First Northern. In addition to that, Salesforce is 1.92 times more volatile than First Northern Community. It trades about -0.08 of its total potential returns per unit of risk. First Northern Community is currently generating about 0.27 per unit of volatility. If you would invest  975.00  in First Northern Community on May 4, 2025 and sell it today you would earn a total of  142.00  from holding First Northern Community or generate 14.56% return on investment over 90 days.

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

Salesforce  vs.  First Northern Community

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 unfluctuating 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.

First Northern Community

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in First Northern Community are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, First Northern displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and First Northern

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

The idea behind Salesforce and First Northern Community 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.