Correlation Between Salesforce and Vanguard Large-cap

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

By analyzing existing cross correlation between Salesforce and Vanguard Large Cap Index, you can compare the effects of market volatilities on Salesforce and Vanguard Large-cap 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 Vanguard Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Vanguard Large-cap.

Diversification Opportunities for Salesforce and Vanguard Large-cap

-0.38

Correlation Coefficient

Salesforce  Vanguard Large-cap

Very good diversification

The 3 months correlation between Salesforce and Vanguard is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Vanguard Large Cap Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vanguard Large Cap 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 Vanguard Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vanguard Large Cap has no effect on the direction of Salesforce i.e., Salesforce and Vanguard Large-cap go up and down completely randomly.

Pair Corralation between Salesforce and Vanguard Large-cap

Considering the 90-day investment horizon Salesforce is expected to under-perform the Vanguard Large-cap. In addition to that, Salesforce is 2.12 times more volatile than Vanguard Large Cap Index. It trades about -0.05 of its total potential returns per unit of risk. Vanguard Large Cap Index is currently generating about 0.28 per unit of volatility. If you would invest  13,068  in Vanguard Large Cap Index on May 3, 2025 and sell it today you would earn a total of  1,679  from holding Vanguard Large Cap Index or generate 12.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Salesforce  vs.  Vanguard Large Cap Index

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.

Vanguard Large Cap

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vanguard Large Cap Index are ranked lower than 22 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Vanguard Large-cap showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Salesforce and Vanguard Large-cap

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

The idea behind Salesforce and Vanguard Large Cap Index 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.