Correlation Between Salesforce and Spectrum Growth

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

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

Diversification Opportunities for Salesforce and Spectrum Growth

-0.34

Correlation Coefficient

Salesforce  Spectrum Growth

Very good diversification

The 3 months correlation between Salesforce and Spectrum is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Spectrum Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Growth 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 Spectrum Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Growth has no effect on the direction of Salesforce i.e., Salesforce and Spectrum Growth go up and down completely randomly.

Pair Corralation between Salesforce and Spectrum Growth

Considering the 90-day investment horizon Salesforce is expected to generate 2.12 times more return on investment than Spectrum Growth. However, Salesforce is 2.12 times more volatile than Spectrum Growth Fund. It trades about 0.03 of its potential returns per unit of risk. Spectrum Growth Fund is currently generating about 0.04 per unit of risk. If you would invest  21,022  in Salesforce on May 3, 2025 and sell it today you would earn a total of  4,811  from holding Salesforce or generate 22.89% return on investment over 90 days.

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

Salesforce  vs.  Spectrum Growth Fund

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.

Spectrum Growth

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Spectrum Growth Fund are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Spectrum Growth may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Salesforce and Spectrum Growth

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

The idea behind Salesforce and Spectrum Growth Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.