Correlation Between SoFi Technologies and Salesforce

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Can any of the company-specific risk be diversified away by investing in both SoFi Technologies and Salesforce 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 SoFi Technologies and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SoFi Technologies and Salesforce, you can compare the effects of market volatilities on SoFi Technologies and Salesforce 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 SoFi Technologies with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of SoFi Technologies and Salesforce.

Diversification Opportunities for SoFi Technologies and Salesforce

  Correlation Coefficient

Very weak diversification

The 3 months correlation between SoFi Technologies and Salesforce is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and SoFi Technologies 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 SoFi Technologies are associated (or correlated) with Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Salesforce go up and down completely randomly.

Pair Corralation between SoFi Technologies and Salesforce

Given the investment horizon of 90 days SoFi Technologies is expected to under-perform the Salesforce. In addition to that, SoFi Technologies is 1.75 times more volatile than Salesforce. It trades about -0.07 of its total potential returns per unit of risk. Salesforce is currently generating about -0.06 per unit of volatility. If you would invest  22,963  in Salesforce on September 7, 2022 and sell it today you would lose (9,636)  from holding Salesforce or give up 41.96% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
ValuesDaily Returns

SoFi Technologies  vs.  Salesforce

 Performance (%) 
SoFi Technologies 
SoFi Technologies Performance
0 of 100
Over the last 90 days SoFi Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in January 2023. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

SoFi Technologies Price Channel

Salesforce Performance
0 of 100
Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest conflicting performance, the Stock's basic indicators remain steady and the new chaos on Wall Street may also be a sign of medium-term gains for the company stakeholders.

Salesforce Price Channel

SoFi Technologies and Salesforce Volatility Contrast

   Predicted Return Density   

Pair Trading with SoFi Technologies and Salesforce

The main advantage of trading using opposite SoFi Technologies and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SoFi Technologies position performs unexpectedly, Salesforce 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 will offset losses from the drop in Salesforce's long position.
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The idea behind SoFi Technologies and Salesforce 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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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 Piotroski F Score module to get Piotroski F Score based on binary analysis strategy of nine different fundamentals.

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