Correlation Between Lightspeed Commerce and Fastly

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

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

Diversification Opportunities for Lightspeed Commerce and Fastly

0.29

Correlation Coefficient

Lightspeed Commerce  Fastly

Modest diversification

The 3 months correlation between Lightspeed and Fastly is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Lightspeed Commerce and Fastly Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fastly Inc 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 Fastly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fastly Inc has no effect on the direction of Lightspeed Commerce i.e., Lightspeed Commerce and Fastly go up and down completely randomly.

Pair Corralation between Lightspeed Commerce and Fastly

Assuming the 90 days trading horizon Lightspeed Commerce is expected to generate 0.6 times more return on investment than Fastly. However, Lightspeed Commerce is 1.67 times less risky than Fastly. It trades about 0.2 of its potential returns per unit of risk. Fastly Inc is currently generating about 0.08 per unit of risk. If you would invest  1,340  in Lightspeed Commerce on May 2, 2025 and sell it today you would earn a total of  480.00  from holding Lightspeed Commerce or generate 35.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Lightspeed Commerce  vs.  Fastly Inc

Lightspeed Commerce

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Lightspeed Commerce are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Lightspeed Commerce displayed solid returns over the last few months and may actually be approaching a breakup point.

Fastly Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Fastly Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady essential indicators, Fastly showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lightspeed Commerce and Fastly

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

The idea behind Lightspeed Commerce and Fastly Inc 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.