Correlation Between Lightspeed Commerce and Aritzia
Can any of the company-specific risk be diversified away by investing in both Lightspeed Commerce and Aritzia 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 Lightspeed Commerce and Aritzia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightspeed Commerce and Aritzia, you can compare the effects of market volatilities on Lightspeed Commerce and Aritzia 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 Lightspeed Commerce with a short position of Aritzia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightspeed Commerce and Aritzia.
Diversification Opportunities for Lightspeed Commerce and Aritzia
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Lightspeed and Aritzia is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lightspeed Commerce and Aritzia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aritzia and Lightspeed Commerce 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 Lightspeed Commerce are associated (or correlated) with Aritzia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aritzia has no effect on the direction of Lightspeed Commerce i.e., Lightspeed Commerce and Aritzia go up and down completely randomly.
Pair Corralation between Lightspeed Commerce and Aritzia
Assuming the 90 days trading horizon Lightspeed Commerce is expected to generate 2.39 times less return on investment than Aritzia. In addition to that, Lightspeed Commerce is 1.11 times more volatile than Aritzia. It trades about 0.03 of its total potential returns per unit of risk. Aritzia is currently generating about 0.09 per unit of volatility. If you would invest 2,632 in Aritzia on August 26, 2024 and sell it today you would earn a total of 1,749 from holding Aritzia or generate 66.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lightspeed Commerce vs. Aritzia
Performance |
| Timeline |
| Lightspeed Commerce |
| Aritzia |
Lightspeed Commerce and Aritzia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightspeed Commerce and Aritzia
The main advantage of trading using opposite Lightspeed Commerce and Aritzia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightspeed Commerce position performs unexpectedly, Aritzia 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 Aritzia will offset losses from the drop in Aritzia's long position.| Lightspeed Commerce vs. Shopify | Lightspeed Commerce vs. WELL Health Technologies | Lightspeed Commerce vs. BlackBerry | Lightspeed Commerce vs. Docebo Inc |
| Aritzia vs. Canada Goose Holdings | Aritzia vs. Restaurant Brands International | Aritzia vs. Lightspeed Commerce | Aritzia vs. goeasy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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