Correlation Between Salesforce and Verb Technology

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

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

Diversification Opportunities for Salesforce and Verb Technology

-0.49

Correlation Coefficient

Salesforce  Verb Technology

Very good diversification

The 3 months correlation between Salesforce and Verb is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Verb Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Verb Technology 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 Verb Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Verb Technology has no effect on the direction of Salesforce i.e., Salesforce and Verb Technology go up and down completely randomly.

Pair Corralation between Salesforce and Verb Technology

Considering the 90-day investment horizon Salesforce is expected to under-perform the Verb Technology. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 4.68 times less risky than Verb Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Verb Technology is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  522.00  in Verb Technology on May 3, 2025 and sell it today you would earn a total of  452.00  from holding Verb Technology or generate 86.59% return on investment over 90 days.

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

Salesforce  vs.  Verb Technology

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.

Verb Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Verb Technology are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Verb Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Verb Technology

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

The idea behind Salesforce and Verb Technology 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.