Correlation Between Quisitive Technology and Lightspeed Commerce

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

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

Diversification Opportunities for Quisitive Technology and Lightspeed Commerce

-0.28

Correlation Coefficient

Quisitive Technology  Lightspeed Commerce

Very good diversification

The 3 months correlation between Quisitive and Lightspeed is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Quisitive Technology Solutions and Lightspeed Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightspeed Commerce and Quisitive Technology 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 Quisitive Technology Solutions 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 Quisitive Technology i.e., Quisitive Technology and Lightspeed Commerce go up and down completely randomly.

Pair Corralation between Quisitive Technology and Lightspeed Commerce

Assuming the 90 days trading horizon Quisitive Technology is expected to generate 12.66 times less return on investment than Lightspeed Commerce. In addition to that, Quisitive Technology is 1.15 times more volatile than Lightspeed Commerce. It trades about 0.02 of its total potential returns per unit of risk. Lightspeed Commerce is currently generating about 0.22 per unit of volatility. If you would invest  1,702  in Lightspeed Commerce on September 5, 2024 and sell it today you would earn a total of  741.00  from holding Lightspeed Commerce or generate 43.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Quisitive Technology Solutions  vs.  Lightspeed Commerce

Quisitive Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Quisitive Technology Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable forward indicators, Quisitive Technology is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Lightspeed Commerce

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Lightspeed Commerce are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Lightspeed Commerce displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quisitive Technology and Lightspeed Commerce

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

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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.