Correlation Between Salesforce and Voya Large

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

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

Diversification Opportunities for Salesforce and Voya Large

0.97

Correlation Coefficient

Salesforce  Voya Large

Almost no diversification

The 3 months correlation between Salesforce and Voya is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Voya Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya 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 Voya Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Large Cap has no effect on the direction of Salesforce i.e., Salesforce and Voya Large go up and down completely randomly.

Pair Corralation between Salesforce and Voya Large

Considering the 90-day investment horizon Salesforce is expected to under-perform the Voya Large. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 1.01 times less risky than Voya Large. The stock trades about -0.06 of its potential returns per unit of risk. The Voya Large Cap is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  1,928  in Voya Large Cap on February 18, 2025 and sell it today you would lose (117.00) from holding Voya Large Cap or give up 6.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.46%
Values	Daily Returns

Salesforce  vs.  Voya Large Cap

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 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.

Voya Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Voya Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical indicators, Voya Large 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 Voya Large

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

The idea behind Salesforce and Voya Large Cap 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.