Correlation Between Constellation Software and Lite Access
Can any of the company-specific risk be diversified away by investing in both Constellation Software and Lite Access 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 Constellation Software and Lite Access into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Constellation Software and Lite Access Technologies, you can compare the effects of market volatilities on Constellation Software and Lite Access 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 Constellation Software with a short position of Lite Access. Check out your portfolio center. Please also check ongoing floating volatility patterns of Constellation Software and Lite Access.
Diversification Opportunities for Constellation Software and Lite Access
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Constellation and Lite is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Constellation Software and Lite Access Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lite Access Technologies and Constellation Software 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 Constellation Software are associated (or correlated) with Lite Access. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lite Access Technologies has no effect on the direction of Constellation Software i.e., Constellation Software and Lite Access go up and down completely randomly.
Pair Corralation between Constellation Software and Lite Access
Assuming the 90 days trading horizon Constellation Software is expected to generate 1.03 times less return on investment than Lite Access. But when comparing it to its historical volatility, Constellation Software is 2.15 times less risky than Lite Access. It trades about 0.1 of its potential returns per unit of risk. Lite Access Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6.00 in Lite Access Technologies on October 29, 2024 and sell it today you would earn a total of 3.50 from holding Lite Access Technologies or generate 58.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.78% |
| Values | Daily Returns |
Constellation Software vs. Lite Access Technologies
Performance |
| Timeline |
| Constellation Software |
| Lite Access Technologies |
Constellation Software and Lite Access Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Constellation Software and Lite Access
The main advantage of trading using opposite Constellation Software and Lite Access positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Constellation Software position performs unexpectedly, Lite Access 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 Lite Access will offset losses from the drop in Lite Access' long position.| Constellation Software vs. Kinaxis | Constellation Software vs. Open Text Corp | Constellation Software vs. Enghouse Systems | Constellation Software vs. CGI Inc |
| Lite Access vs. Braille Energy Systems | Lite Access vs. Manganese X Energy | Lite Access vs. Solar Alliance Energy | Lite Access vs. Therma Bright |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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