Correlation Between Lightspeed Commerce and Enbridge
Can any of the company-specific risk be diversified away by investing in both Lightspeed Commerce and Enbridge 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 Enbridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lightspeed Commerce and Enbridge, you can compare the effects of market volatilities on Lightspeed Commerce and Enbridge 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 Enbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lightspeed Commerce and Enbridge.
Diversification Opportunities for Lightspeed Commerce and Enbridge
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Lightspeed and Enbridge is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Lightspeed Commerce and Enbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enbridge 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 Enbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enbridge has no effect on the direction of Lightspeed Commerce i.e., Lightspeed Commerce and Enbridge go up and down completely randomly.
Pair Corralation between Lightspeed Commerce and Enbridge
Assuming the 90 days trading horizon Lightspeed Commerce is expected to generate 2.59 times more return on investment than Enbridge. However, Lightspeed Commerce is 2.59 times more volatile than Enbridge. It trades about 0.48 of its potential returns per unit of risk. Enbridge is currently generating about 0.44 per unit of risk. If you would invest 2,101 in Lightspeed Commerce on September 3, 2024 and sell it today you would earn a total of 524.00 from holding Lightspeed Commerce or generate 24.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lightspeed Commerce vs. Enbridge
Performance |
| Timeline |
| Lightspeed Commerce |
| Enbridge |
Lightspeed Commerce and Enbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lightspeed Commerce and Enbridge
The main advantage of trading using opposite Lightspeed Commerce and Enbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lightspeed Commerce position performs unexpectedly, Enbridge 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 Enbridge will offset losses from the drop in Enbridge's long position.| Lightspeed Commerce vs. Shopify | Lightspeed Commerce vs. WELL Health Technologies | Lightspeed Commerce vs. BlackBerry | Lightspeed Commerce vs. Docebo Inc |
| Enbridge vs. Suncor Energy | Enbridge vs. Toronto Dominion Bank | Enbridge vs. Bank of Nova | Enbridge vs. BCE 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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