Correlation Between Salesforce and LeadDesk Oyj

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

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

Diversification Opportunities for Salesforce and LeadDesk Oyj

-0.62

Correlation Coefficient

Salesforce  LeadDesk Oyj

Excellent diversification

The 3 months correlation between Salesforce and LeadDesk is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and LeadDesk Oyj in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LeadDesk Oyj 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 LeadDesk Oyj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LeadDesk Oyj has no effect on the direction of Salesforce i.e., Salesforce and LeadDesk Oyj go up and down completely randomly.

Pair Corralation between Salesforce and LeadDesk Oyj

Considering the 90-day investment horizon Salesforce is expected to under-perform the LeadDesk Oyj. But the stock apears to be less risky and, when comparing its historical volatility, Salesforce is 2.42 times less risky than LeadDesk Oyj. The stock trades about -0.28 of its potential returns per unit of risk. The LeadDesk Oyj is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  614.00  in LeadDesk Oyj on October 23, 2024 and sell it today you would earn a total of  80.00  from holding LeadDesk Oyj or generate 13.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	83.33%
Values	Daily Returns

Salesforce  vs.  LeadDesk Oyj

Salesforce

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Salesforce are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Salesforce displayed solid returns over the last few months and may actually be approaching a breakup point.

LeadDesk Oyj

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days LeadDesk Oyj has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical indicators, LeadDesk Oyj is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Salesforce and LeadDesk Oyj

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

The idea behind Salesforce and LeadDesk Oyj 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.