Correlation Between Salesforce and Emerging Economies

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

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

Diversification Opportunities for Salesforce and Emerging Economies

-0.62

Correlation Coefficient

Salesforce  Emerging Economies

Excellent diversification

The 3 months correlation between Salesforce and Emerging is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Emerging Economies Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Economies 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 Economies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Economies has no effect on the direction of Salesforce i.e., Salesforce and Emerging Economies go up and down completely randomly.

Pair Corralation between Salesforce and Emerging Economies

Considering the 90-day investment horizon Salesforce is expected to under-perform the Emerging Economies. In addition to that, Salesforce is 2.42 times more volatile than Emerging Economies Fund. It trades about -0.22 of its total potential returns per unit of risk. Emerging Economies Fund is currently generating about 0.15 per unit of volatility. If you would invest  719.00  in Emerging Economies Fund on May 28, 2025 and sell it today you would earn a total of  17.00  from holding Emerging Economies Fund or generate 2.36% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

Salesforce  vs.  Emerging Economies Fund

Salesforce

Risk-Adjusted Performance

Weakest

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Emerging Economies

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Emerging Economies Fund are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Emerging Economies may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Salesforce and Emerging Economies

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

The idea behind Salesforce and Emerging Economies 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.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.