Correlation Between SALESFORCE INC and AIR PRODCHEMICALS

Can any of the company-specific risk be diversified away by investing in both SALESFORCE INC and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS 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 AIR PRODCHEMICALS, you can compare the effects of market volatilities on SALESFORCE INC and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of SALESFORCE INC and AIR PRODCHEMICALS.

Diversification Opportunities for SALESFORCE INC and AIR PRODCHEMICALS

-0.26

Correlation Coefficient

SALESFORCE INC  AIR PRODCHEMICALS

Very good diversification

The 3 months correlation between SALESFORCE and AIR is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding SALESFORCE INC CDR and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of SALESFORCE INC i.e., SALESFORCE INC and AIR PRODCHEMICALS go up and down completely randomly.

Pair Corralation between SALESFORCE INC and AIR PRODCHEMICALS

Assuming the 90 days trading horizon SALESFORCE INC CDR is expected to under-perform the AIR PRODCHEMICALS. In addition to that, SALESFORCE INC is 1.95 times more volatile than AIR PRODCHEMICALS. It trades about -0.02 of its total potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about 0.16 per unit of volatility. If you would invest  22,309  in AIR PRODCHEMICALS on April 22, 2025 and sell it today you would earn a total of  2,911  from holding AIR PRODCHEMICALS or generate 13.05% return on investment over 90 days.

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

SALESFORCE INC CDR  vs.  AIR PRODCHEMICALS

SALESFORCE INC CDR

Risk-Adjusted Performance

Very Weak

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

AIR PRODCHEMICALS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in AIR PRODCHEMICALS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, AIR PRODCHEMICALS may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with SALESFORCE INC and AIR PRODCHEMICALS

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

The idea behind SALESFORCE INC CDR and AIR PRODCHEMICALS 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.