Correlation Between Salesforce and First United

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

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

Diversification Opportunities for Salesforce and First United

-0.21

Correlation Coefficient

Salesforce  First United

Very good diversification

The 3 months correlation between Salesforce and First is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and First United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First United 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 United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First United has no effect on the direction of Salesforce i.e., Salesforce and First United go up and down completely randomly.

Pair Corralation between Salesforce and First United

Considering the 90-day investment horizon Salesforce is expected to under-perform the First United. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.33 times less risky than First United. The stock trades about -0.22 of its potential returns per unit of risk. The First United is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,188  in First United on May 15, 2025 and sell it today you would earn a total of  333.00  from holding First United or generate 10.45% 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 United

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 unsteady 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.

First United

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in First United are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, First United may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Salesforce and First United

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

The idea behind Salesforce and First United 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.