Correlation Between Salesforce and Lucid
Can any of the company-specific risk be diversified away by investing in both Salesforce and Lucid 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 Lucid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Lucid Group, you can compare the effects of market volatilities on Salesforce and Lucid 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 Lucid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Lucid.
Diversification Opportunities for Salesforce and Lucid
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Salesforce and Lucid is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Lucid Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucid Group 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 Lucid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucid Group has no effect on the direction of Salesforce i.e., Salesforce and Lucid go up and down completely randomly.
Pair Corralation between Salesforce and Lucid
Considering the 90-day investment horizon Salesforce is expected to generate 1.17 times less return on investment than Lucid. But when comparing it to its historical volatility, Salesforce is 2.22 times less risky than Lucid. It trades about 0.05 of its potential returns per unit of risk. Lucid Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 288.00 in Lucid Group on November 9, 2024 and sell it today you would earn a total of 1.00 from holding Lucid Group or generate 0.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Lucid Group
Performance |
| Timeline |
| Salesforce |
| Lucid Group |
Salesforce and Lucid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Lucid
The main advantage of trading using opposite Salesforce and Lucid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Lucid 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 Lucid will offset losses from the drop in Lucid's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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