Correlation Between SPS Commerce and Glimpse

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

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

Diversification Opportunities for SPS Commerce and Glimpse

0.17

Correlation Coefficient

SPS Commerce  Glimpse

Average diversification

The 3 months correlation between SPS and Glimpse is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding SPS Commerce and Glimpse Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glimpse Group and SPS 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 SPS Commerce are associated (or correlated) with Glimpse. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glimpse Group has no effect on the direction of SPS Commerce i.e., SPS Commerce and Glimpse go up and down completely randomly.

Pair Corralation between SPS Commerce and Glimpse

Given the investment horizon of 90 days SPS Commerce is expected to under-perform the Glimpse. But the stock apears to be less risky and, when comparing its historical volatility, SPS Commerce is 7.08 times less risky than Glimpse. The stock trades about -0.01 of its potential returns per unit of risk. The Glimpse Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  71.00  in Glimpse Group on September 22, 2024 and sell it today you would earn a total of  278.00  from holding Glimpse Group or generate 391.55% return on investment over 90 days.

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

SPS Commerce  vs.  Glimpse Group

SPS Commerce

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPS Commerce has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SPS Commerce is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Glimpse Group

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Glimpse Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Glimpse reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SPS Commerce and Glimpse

The main advantage of trading using opposite SPS Commerce and Glimpse positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPS Commerce position performs unexpectedly, Glimpse 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 Glimpse will offset losses from the drop in Glimpse's long position.

The idea behind SPS Commerce and Glimpse Group 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 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..