Correlation Between Salesforce and Graph

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

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

Diversification Opportunities for Salesforce and Graph

0.32

Correlation Coefficient

Salesforce  Graph

Weak diversification

The 3 months correlation between Salesforce and Graph is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and The Graph in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graph 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 Graph. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graph has no effect on the direction of Salesforce i.e., Salesforce and Graph go up and down completely randomly.

Pair Corralation between Salesforce and Graph

Considering the 90-day investment horizon Salesforce is expected to generate 117.96 times less return on investment than Graph. But when comparing it to its historical volatility, Salesforce is 3.26 times less risky than Graph. It trades about 0.01 of its potential returns per unit of risk. The Graph is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest  8.41  in The Graph on April 24, 2025 and sell it today you would earn a total of  2.59  from holding The Graph or generate 30.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Salesforce  vs.  The Graph

Salesforce

Risk-Adjusted Performance

Insignificant

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.

Graph

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in The Graph are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Graph exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Graph

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

The idea behind Salesforce and The Graph 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.