Correlation Between Salesforce and CORTEX PHARMACEUTIC

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

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

Diversification Opportunities for Salesforce and CORTEX PHARMACEUTIC

-0.61

Correlation Coefficient

Salesforce  CORTEX PHARMACEUTIC

Excellent diversification

The 3 months correlation between Salesforce and CORTEX is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and CORTEX PHARMACEUTIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORTEX PHARMACEUTIC 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 CORTEX PHARMACEUTIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORTEX PHARMACEUTIC has no effect on the direction of Salesforce i.e., Salesforce and CORTEX PHARMACEUTIC go up and down completely randomly.

Pair Corralation between Salesforce and CORTEX PHARMACEUTIC

Considering the 90-day investment horizon Salesforce is expected to under-perform the CORTEX PHARMACEUTIC. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.41 times less risky than CORTEX PHARMACEUTIC. The stock trades about -0.05 of its potential returns per unit of risk. The CORTEX PHARMACEUTIC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  381.00  in CORTEX PHARMACEUTIC on May 3, 2025 and sell it today you would earn a total of  54.00  from holding CORTEX PHARMACEUTIC or generate 14.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	57.38%
Values	Daily Returns

Salesforce  vs.  CORTEX PHARMACEUTIC

Salesforce

Risk-Adjusted Performance

Very 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.

CORTEX PHARMACEUTIC

Risk-Adjusted Performance

OK

Over the last 90 days CORTEX PHARMACEUTIC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating technical indicators, CORTEX PHARMACEUTIC showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and CORTEX PHARMACEUTIC

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

The idea behind Salesforce and CORTEX PHARMACEUTIC 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.