Correlation Between LYFT and SPO Networks

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

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

Diversification Opportunities for LYFT and SPO Networks

-0.48

Correlation Coefficient

LYFT  SPO Networks

Very good diversification

The 3 months correlation between LYFT and SPO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding LYFT Inc and SPO Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPO Networks and LYFT 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 LYFT Inc are associated (or correlated) with SPO Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPO Networks has no effect on the direction of LYFT i.e., LYFT and SPO Networks go up and down completely randomly.

Pair Corralation between LYFT and SPO Networks

If you would invest  1,320  in LYFT Inc on May 3, 2025 and sell it today you would earn a total of  86.00  from holding LYFT Inc or generate 6.52% return on investment over 90 days.

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

LYFT Inc  vs.  SPO Networks

LYFT Inc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in LYFT Inc are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating technical and fundamental indicators, LYFT may actually be approaching a critical reversion point that can send shares even higher in September 2025.

SPO Networks

Risk-Adjusted Performance

Very Weak

Over the last 90 days SPO Networks has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, SPO Networks is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with LYFT and SPO Networks

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

The idea behind LYFT Inc and SPO Networks 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.