Correlation Between Salesforce and Emerging Markets

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

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

Diversification Opportunities for Salesforce and Emerging Markets

-0.02

Correlation Coefficient

Salesforce  Emerging Markets

Good diversification

The 3 months correlation between Salesforce and Emerging is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Salesforce i.e., Salesforce and Emerging Markets go up and down completely randomly.

Pair Corralation between Salesforce and Emerging Markets

Considering the 90-day investment horizon Salesforce is expected to generate 8.64 times less return on investment than Emerging Markets. In addition to that, Salesforce is 1.97 times more volatile than Emerging Markets Portfolio. It trades about 0.02 of its total potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.26 per unit of volatility. If you would invest  2,131  in Emerging Markets Portfolio on April 30, 2025 and sell it today you would earn a total of  274.00  from holding Emerging Markets Portfolio or generate 12.86% return on investment over 90 days.

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

Salesforce  vs.  Emerging Markets Portfolio

Salesforce

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Emerging Markets Por

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Markets Portfolio are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental drivers, Emerging Markets showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Emerging Markets

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

The idea behind Salesforce and Emerging Markets Portfolio 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.