Correlation Between Salesforce and MicroAlgo

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

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

Diversification Opportunities for Salesforce and MicroAlgo

0.65

Correlation Coefficient

Salesforce  MicroAlgo

Poor diversification

The 3 months correlation between Salesforce and MicroAlgo is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Salesforce i.e., Salesforce and MicroAlgo go up and down completely randomly.

Pair Corralation between Salesforce and MicroAlgo

Considering the 90-day investment horizon Salesforce is expected to generate 0.13 times more return on investment than MicroAlgo. However, Salesforce is 7.7 times less risky than MicroAlgo. It trades about -0.19 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.27 per unit of risk. If you would invest  28,836  in Salesforce on May 12, 2025 and sell it today you would lose (4,785) from holding Salesforce or give up 16.59% of portfolio value over 90 days.

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

Salesforce  vs.  MicroAlgo

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 unfluctuating 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.

MicroAlgo

Risk-Adjusted Performance

Weakest

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with Salesforce and MicroAlgo

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

The idea behind Salesforce and MicroAlgo 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.