Correlation Between Salesforce and Bitfarms

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

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

Diversification Opportunities for Salesforce and Bitfarms

0.0

Correlation Coefficient

Salesforce  Bitfarms

Pay attention - limited upside

The 3 months correlation between Salesforce and Bitfarms is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Bitfarms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bitfarms 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 Bitfarms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bitfarms has no effect on the direction of Salesforce i.e., Salesforce and Bitfarms go up and down completely randomly.

Pair Corralation between Salesforce and Bitfarms

If you would invest  16,003  in Salesforce on January 20, 2024 and sell it today you would earn a total of  11,189  from holding Salesforce or generate 69.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Salesforce  vs.  Bitfarms

Salesforce

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, Salesforce is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Bitfarms

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Salesforce and Bitfarms

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

The idea behind Salesforce and Bitfarms 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.