Correlation Between Salesforce and Strategic Alternatives

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

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

Diversification Opportunities for Salesforce and Strategic Alternatives

0.05

Correlation Coefficient

Salesforce  Strategic Alternatives

Significant diversification

The 3 months correlation between Salesforce and STRATEGIC is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Strategic Alternatives Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Alternatives 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 Strategic Alternatives. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Alternatives has no effect on the direction of Salesforce i.e., Salesforce and Strategic Alternatives go up and down completely randomly.

Pair Corralation between Salesforce and Strategic Alternatives

Considering the 90-day investment horizon Salesforce is expected to generate 4.93 times more return on investment than Strategic Alternatives. However, Salesforce is 4.93 times more volatile than Strategic Alternatives Fund. It trades about 0.04 of its potential returns per unit of risk. Strategic Alternatives Fund is currently generating about 0.01 per unit of risk. If you would invest  20,517  in Salesforce on February 11, 2025 and sell it today you would earn a total of  7,025  from holding Salesforce or generate 34.24% return on investment over 90 days.

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

Salesforce  vs.  Strategic Alternatives Fund

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.

Strategic Alternatives

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Alternatives Fund are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Strategic Alternatives is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Strategic Alternatives

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

The idea behind Salesforce and Strategic Alternatives 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.