Correlation Between Salesforce and Simplify Equity

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

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

Diversification Opportunities for Salesforce and Simplify Equity

-0.19

Correlation Coefficient

Salesforce  Simplify Equity

Good diversification

The 3 months correlation between Salesforce and Simplify is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Simplify Equity PLUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Equity PLUS 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 Simplify Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Equity PLUS has no effect on the direction of Salesforce i.e., Salesforce and Simplify Equity go up and down completely randomly.

Pair Corralation between Salesforce and Simplify Equity

Considering the 90-day investment horizon Salesforce is expected to generate 118.19 times less return on investment than Simplify Equity. In addition to that, Salesforce is 1.9 times more volatile than Simplify Equity PLUS. It trades about 0.0 of its total potential returns per unit of risk. Simplify Equity PLUS is currently generating about 0.31 per unit of volatility. If you would invest  3,695  in Simplify Equity PLUS on May 1, 2025 and sell it today you would earn a total of  595.00  from holding Simplify Equity PLUS or generate 16.1% return on investment over 90 days.

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

Salesforce  vs.  Simplify Equity PLUS

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.

Simplify Equity PLUS

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Equity PLUS are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent fundamental drivers, Simplify Equity exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Simplify Equity

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

The idea behind Salesforce and Simplify Equity PLUS 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.