Correlation Between Manhattan Associates and Salesforce

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

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

Diversification Opportunities for Manhattan Associates and Salesforce

0.46

Correlation Coefficient

Manhattan Associates  Salesforce

Very weak diversification

The 3 months correlation between Manhattan and Salesforce is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Associates and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce and Manhattan Associates 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 Manhattan Associates 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 Manhattan Associates i.e., Manhattan Associates and Salesforce go up and down completely randomly.

Pair Corralation between Manhattan Associates and Salesforce

Given the investment horizon of 90 days Manhattan Associates is expected to generate 2.51 times less return on investment than Salesforce. In addition to that, Manhattan Associates is 1.08 times more volatile than Salesforce. It trades about 0.1 of its total potential returns per unit of risk. Salesforce is currently generating about 0.28 per unit of volatility. If you would invest  24,729  in Salesforce on September 4, 2024 and sell it today you would earn a total of  8,372  from holding Salesforce or generate 33.85% return on investment over 90 days.

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

Manhattan Associates  vs.  Salesforce

Manhattan Associates

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Manhattan Associates are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Manhattan Associates may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Salesforce

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Manhattan Associates and Salesforce

The main advantage of trading using opposite Manhattan Associates and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan Associates 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.

The idea behind Manhattan Associates 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .