Correlation Between Salesforce and InterDigital

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

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

Diversification Opportunities for Salesforce and InterDigital

-0.1

Correlation Coefficient

Salesforce  InterDigital

Good diversification

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

Pair Corralation between Salesforce and InterDigital

Considering the 90-day investment horizon Salesforce is expected to generate 77.24 times less return on investment than InterDigital. In addition to that, Salesforce is 1.13 times more volatile than InterDigital. It trades about 0.0 of its total potential returns per unit of risk. InterDigital is currently generating about 0.12 per unit of volatility. If you would invest  20,161  in InterDigital on May 1, 2025 and sell it today you would earn a total of  1,974  from holding InterDigital or generate 9.79% return on investment over 90 days.

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

Salesforce  vs.  InterDigital

Salesforce

Risk-Adjusted Performance

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.

InterDigital

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InterDigital are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, InterDigital may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Salesforce and InterDigital

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

The idea behind Salesforce and InterDigital 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..