Correlation Between Citadel Income and Lightspeed Commerce
Can any of the company-specific risk be diversified away by investing in both Citadel Income and Lightspeed Commerce 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 Citadel Income and Lightspeed Commerce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citadel Income and Lightspeed Commerce, you can compare the effects of market volatilities on Citadel Income and Lightspeed Commerce 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 Citadel Income with a short position of Lightspeed Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citadel Income and Lightspeed Commerce.
Diversification Opportunities for Citadel Income and Lightspeed Commerce
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Citadel and Lightspeed is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Citadel Income and Lightspeed Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightspeed Commerce and Citadel Income 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 Citadel Income are associated (or correlated) with Lightspeed Commerce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightspeed Commerce has no effect on the direction of Citadel Income i.e., Citadel Income and Lightspeed Commerce go up and down completely randomly.
Pair Corralation between Citadel Income and Lightspeed Commerce
Assuming the 90 days trading horizon Citadel Income is expected to generate 2.92 times less return on investment than Lightspeed Commerce. But when comparing it to its historical volatility, Citadel Income is 1.71 times less risky than Lightspeed Commerce. It trades about 0.02 of its potential returns per unit of risk. Lightspeed Commerce is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,078 in Lightspeed Commerce on August 28, 2024 and sell it today you would earn a total of 488.00 from holding Lightspeed Commerce or generate 23.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citadel Income vs. Lightspeed Commerce
Performance |
| Timeline |
| Citadel Income |
| Lightspeed Commerce |
Citadel Income and Lightspeed Commerce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citadel Income and Lightspeed Commerce
The main advantage of trading using opposite Citadel Income and Lightspeed Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citadel Income position performs unexpectedly, Lightspeed Commerce 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 Lightspeed Commerce will offset losses from the drop in Lightspeed Commerce's long position.| Citadel Income vs. Tech Leaders Income | Citadel Income vs. BetaPro SPTSX 60 | Citadel Income vs. Brompton Global Dividend | Citadel Income vs. Global X Active |
| Lightspeed Commerce vs. Slate Grocery REIT | Lightspeed Commerce vs. Roots Corp | Lightspeed Commerce vs. Aimia Inc | Lightspeed Commerce vs. Tucows Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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