Correlation Between Salesforce and Lekoil
Can any of the company-specific risk be diversified away by investing in both Salesforce and Lekoil 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 Lekoil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Lekoil Limited, you can compare the effects of market volatilities on Salesforce and Lekoil 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 Lekoil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Lekoil.
Diversification Opportunities for Salesforce and Lekoil
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and Lekoil is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Lekoil Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lekoil Limited 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 Lekoil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lekoil Limited has no effect on the direction of Salesforce i.e., Salesforce and Lekoil go up and down completely randomly.
Pair Corralation between Salesforce and Lekoil
Considering the 90-day investment horizon Salesforce is expected to generate 4.47 times less return on investment than Lekoil. But when comparing it to its historical volatility, Salesforce is 4.19 times less risky than Lekoil. It trades about 0.06 of its potential returns per unit of risk. Lekoil Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.55 in Lekoil Limited on August 27, 2024 and sell it today you would earn a total of 0.50 from holding Lekoil Limited or generate 90.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Salesforce vs. Lekoil Limited
Performance |
| Timeline |
| Salesforce |
| Lekoil Limited |
Salesforce and Lekoil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Lekoil
The main advantage of trading using opposite Salesforce and Lekoil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Lekoil 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 Lekoil will offset losses from the drop in Lekoil's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Lekoil vs. EOG Resources | Lekoil vs. Canadian Natural Resources | Lekoil vs. Pioneer Natural Resources | Lekoil vs. Woodside Energy Group |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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