Correlation Between Salesforce and Lionheart Holdings

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

By analyzing existing cross correlation between Salesforce and Lionheart Holdings, you can compare the effects of market volatilities on Salesforce and Lionheart Holdings 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 Lionheart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Lionheart Holdings.

Diversification Opportunities for Salesforce and Lionheart Holdings

-0.9

Correlation Coefficient

Salesforce  Lionheart Holdings

Pay attention - limited upside

The 3 months correlation between Salesforce and Lionheart is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Lionheart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lionheart Holdings 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 Lionheart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lionheart Holdings has no effect on the direction of Salesforce i.e., Salesforce and Lionheart Holdings go up and down completely randomly.

Pair Corralation between Salesforce and Lionheart Holdings

Considering the 90-day investment horizon Salesforce is expected to under-perform the Lionheart Holdings. In addition to that, Salesforce is 19.44 times more volatile than Lionheart Holdings. It trades about -0.18 of its total potential returns per unit of risk. Lionheart Holdings is currently generating about 0.23 per unit of volatility. If you would invest  1,010  in Lionheart Holdings on December 30, 2024 and sell it today you would earn a total of  14.00  from holding Lionheart Holdings or generate 1.39% return on investment over 90 days.

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

Salesforce  vs.  Lionheart Holdings

Salesforce

Risk-Adjusted Performance

Very Weak

Over the last 90 days Salesforce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Lionheart Holdings

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lionheart Holdings are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Lionheart Holdings is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Salesforce and Lionheart Holdings

The main advantage of trading using opposite Salesforce and Lionheart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Lionheart Holdings 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 Lionheart Holdings will offset losses from the drop in Lionheart Holdings' long position.

The idea behind Salesforce and Lionheart Holdings 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.