Correlation Between Salesforce and Defensive Market

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

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

Diversification Opportunities for Salesforce and Defensive Market

-0.54

Correlation Coefficient

Salesforce  Defensive Market

Excellent diversification

The 3 months correlation between Salesforce and Defensive is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Defensive Market Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defensive Market Str 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 Defensive Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defensive Market Str has no effect on the direction of Salesforce i.e., Salesforce and Defensive Market go up and down completely randomly.

Pair Corralation between Salesforce and Defensive Market

Considering the 90-day investment horizon Salesforce is expected to under-perform the Defensive Market. In addition to that, Salesforce is 5.7 times more volatile than Defensive Market Strategies. It trades about -0.05 of its total potential returns per unit of risk. Defensive Market Strategies is currently generating about 0.22 per unit of volatility. If you would invest  1,187  in Defensive Market Strategies on July 14, 2025 and sell it today you would earn a total of  52.00  from holding Defensive Market Strategies or generate 4.38% return on investment over 90 days.

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

Salesforce  vs.  Defensive Market Strategies

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.

Defensive Market Str

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Defensive Market Strategies are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Defensive Market is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Defensive Market

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

The idea behind Salesforce and Defensive Market Strategies 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.