Correlation Between SALESFORCE INC and Check Point

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

By analyzing existing cross correlation between SALESFORCE INC CDR and Check Point Software, you can compare the effects of market volatilities on SALESFORCE INC and Check Point 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 INC with a short position of Check Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and Check Point.

Diversification Opportunities for SALESFORCE INC and Check Point

-0.19

Correlation Coefficient

SALESFORCE INC  Check Point

Good diversification

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

Pair Corralation between SALESFORCE INC and Check Point

Assuming the 90 days trading horizon SALESFORCE INC CDR is expected to generate 1.7 times more return on investment than Check Point. However, SALESFORCE INC is 1.7 times more volatile than Check Point Software. It trades about -0.01 of its potential returns per unit of risk. Check Point Software is currently generating about -0.07 per unit of risk. If you would invest  1,158  in SALESFORCE INC CDR on July 8, 2025 and sell it today you would lose (68.00) from holding SALESFORCE INC CDR or give up 5.87% of portfolio value over 90 days.

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

SALESFORCE INC CDR  vs.  Check Point Software

SALESFORCE INC CDR

Risk-Adjusted Performance

Weakest

Over the last 90 days SALESFORCE INC CDR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, SALESFORCE INC is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Check Point Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Check Point Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with SALESFORCE INC and Check Point

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

The idea behind SALESFORCE INC CDR and Check Point Software 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.