Correlation Between Biosyent and Lightspeed Commerce

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

By analyzing existing cross correlation between Biosyent and Lightspeed Commerce, you can compare the effects of market volatilities on Biosyent 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 Biosyent with a short position of Lightspeed Commerce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Biosyent and Lightspeed Commerce.

Diversification Opportunities for Biosyent and Lightspeed Commerce

0.23

Correlation Coefficient

Biosyent  Lightspeed Commerce

Modest diversification

The 3 months correlation between Biosyent and Lightspeed is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Biosyent and Lightspeed Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightspeed Commerce and Biosyent 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 Biosyent 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 Biosyent i.e., Biosyent and Lightspeed Commerce go up and down completely randomly.

Pair Corralation between Biosyent and Lightspeed Commerce

Given the investment horizon of 90 days Biosyent is expected to generate 1.26 times less return on investment than Lightspeed Commerce. But when comparing it to its historical volatility, Biosyent is 1.47 times less risky than Lightspeed Commerce. It trades about 0.08 of its potential returns per unit of risk. Lightspeed Commerce is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,879  in Lightspeed Commerce on September 29, 2024 and sell it today you would earn a total of  373.00  from holding Lightspeed Commerce or generate 19.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Biosyent  vs.  Lightspeed Commerce

Biosyent

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Biosyent are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Biosyent may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lightspeed Commerce

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Lightspeed Commerce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Lightspeed Commerce is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Biosyent and Lightspeed Commerce

The main advantage of trading using opposite Biosyent and Lightspeed Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Biosyent 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.

The idea behind Biosyent and Lightspeed Commerce 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.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.