Correlation Between FLOW TRADERS and SALESFORCE INC

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

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

Diversification Opportunities for FLOW TRADERS and SALESFORCE INC

-0.04

Correlation Coefficient

FLOW TRADERS  SALESFORCE INC

Good diversification

The 3 months correlation between FLOW and SALESFORCE is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding FLOW TRADERS LTD and SALESFORCE INC CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALESFORCE INC CDR and FLOW TRADERS 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 FLOW TRADERS LTD are associated (or correlated) with SALESFORCE INC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALESFORCE INC CDR has no effect on the direction of FLOW TRADERS i.e., FLOW TRADERS and SALESFORCE INC go up and down completely randomly.

Pair Corralation between FLOW TRADERS and SALESFORCE INC

Assuming the 90 days horizon FLOW TRADERS LTD is expected to under-perform the SALESFORCE INC. In addition to that, FLOW TRADERS is 1.25 times more volatile than SALESFORCE INC CDR. It trades about -0.03 of its total potential returns per unit of risk. SALESFORCE INC CDR is currently generating about -0.02 per unit of volatility. If you would invest  1,118  in SALESFORCE INC CDR on April 20, 2025 and sell it today you would lose (58.00) from holding SALESFORCE INC CDR or give up 5.19% of portfolio value over 90 days.

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

FLOW TRADERS LTD  vs.  SALESFORCE INC CDR

FLOW TRADERS LTD

Risk-Adjusted Performance

Very Weak

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

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

Pair Trading with FLOW TRADERS and SALESFORCE INC

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

The idea behind FLOW TRADERS LTD and SALESFORCE INC CDR 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.