Correlation Between Salesforce and Natural Health

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

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

Diversification Opportunities for Salesforce and Natural Health

-0.15

Correlation Coefficient

Salesforce  Natural Health

Good diversification

The 3 months correlation between Salesforce and Natural is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Natural Health Trend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Natural Health Trend 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 Natural Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Natural Health Trend has no effect on the direction of Salesforce i.e., Salesforce and Natural Health go up and down completely randomly.

Pair Corralation between Salesforce and Natural Health

Considering the 90-day investment horizon Salesforce is expected to generate 1.03 times more return on investment than Natural Health. However, Salesforce is 1.03 times more volatile than Natural Health Trend. It trades about 0.04 of its potential returns per unit of risk. Natural Health Trend is currently generating about 0.03 per unit of risk. If you would invest  20,876  in Salesforce on February 8, 2025 and sell it today you would earn a total of  7,098  from holding Salesforce or generate 34.0% return on investment over 90 days.

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

Salesforce  vs.  Natural Health Trend

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.

Natural Health Trend

Risk-Adjusted Performance

Very Weak

Over the last 90 days Natural Health Trend has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Natural Health is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Salesforce and Natural Health

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

The idea behind Salesforce and Natural Health Trend 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.