Correlation Between Lion One and Salesforce
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and SalesforceCom CDR, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Salesforce.
Diversification Opportunities for Lion One and Salesforce
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Lion and Salesforce is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and SalesforceCom CDR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SalesforceCom CDR and Lion One 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 Lion One Metals 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 SalesforceCom CDR has no effect on the direction of Lion One i.e., Lion One and Salesforce go up and down completely randomly.
Pair Corralation between Lion One and Salesforce
Assuming the 90 days horizon Lion One Metals is expected to generate 3.41 times more return on investment than Salesforce. However, Lion One is 3.41 times more volatile than SalesforceCom CDR. It trades about 0.26 of its potential returns per unit of risk. SalesforceCom CDR is currently generating about 0.09 per unit of risk. If you would invest 28.00 in Lion One Metals on November 3, 2024 and sell it today you would earn a total of 10.00 from holding Lion One Metals or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. SalesforceCom CDR
Performance |
| Timeline |
| Lion One Metals |
| SalesforceCom CDR |
Lion One and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Salesforce
The main advantage of trading using opposite Lion One and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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 Lion One Metals and SalesforceCom CDR 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.| Salesforce vs. Primaris Retail RE | Salesforce vs. Plaza Retail REIT | Salesforce vs. Firan Technology Group | Salesforce vs. TGS Esports |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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