Correlation Between Salesforce and LHA Market
Can any of the company-specific risk be diversified away by investing in both Salesforce and LHA Market 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 LHA Market into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and LHA Market State, you can compare the effects of market volatilities on Salesforce and LHA Market 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 LHA Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and LHA Market.
Diversification Opportunities for Salesforce and LHA Market
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Salesforce and LHA is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and LHA Market State in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LHA Market State 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 LHA Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LHA Market State has no effect on the direction of Salesforce i.e., Salesforce and LHA Market go up and down completely randomly.
Pair Corralation between Salesforce and LHA Market
Considering the 90-day investment horizon Salesforce is expected to generate 3.56 times more return on investment than LHA Market. However, Salesforce is 3.56 times more volatile than LHA Market State. It trades about 0.38 of its potential returns per unit of risk. LHA Market State is currently generating about -0.05 per unit of risk. If you would invest 29,046 in Salesforce on August 26, 2024 and sell it today you would earn a total of 5,156 from holding Salesforce or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. LHA Market State
Performance |
| Timeline |
| Salesforce |
| LHA Market State |
Salesforce and LHA Market Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and LHA Market
The main advantage of trading using opposite Salesforce and LHA Market positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, LHA Market 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 LHA Market will offset losses from the drop in LHA Market's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
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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 the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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