Correlation Between Salesforce and Simt Sp

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

By analyzing existing cross correlation between Salesforce and Simt Sp 500, you can compare the effects of market volatilities on Salesforce and Simt Sp 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 Simt Sp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Simt Sp.

Diversification Opportunities for Salesforce and Simt Sp

0.92

Correlation Coefficient

Salesforce  Simt Sp

Almost no diversification

The 3 months correlation between Salesforce and Simt is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Simt Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Sp 500 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 Simt Sp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Sp 500 has no effect on the direction of Salesforce i.e., Salesforce and Simt Sp go up and down completely randomly.

Pair Corralation between Salesforce and Simt Sp

Considering the 90-day investment horizon Salesforce is expected to under-perform the Simt Sp. In addition to that, Salesforce is 1.21 times more volatile than Simt Sp 500. It trades about -0.11 of its total potential returns per unit of risk. Simt Sp 500 is currently generating about -0.05 per unit of volatility. If you would invest  9,733  in Simt Sp 500 on February 6, 2025 and sell it today you would lose (740.00) from holding Simt Sp 500 or give up 7.6% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.41%
Values	Daily Returns

Salesforce  vs.  Simt Sp 500

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 unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Simt Sp 500

Risk-Adjusted Performance

Very Weak

Over the last 90 days Simt Sp 500 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Salesforce and Simt Sp

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

The idea behind Salesforce and Simt Sp 500 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.