Correlation Between Unity Software and Lightspeed Commerce

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

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

Diversification Opportunities for Unity Software and Lightspeed Commerce

0.84

Correlation Coefficient

Unity Software  Lightspeed Commerce

Very poor diversification

The 3 months correlation between Unity and Lightspeed is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Unity Software and Lightspeed Commerce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightspeed Commerce and Unity Software 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 Unity Software 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 Unity Software i.e., Unity Software and Lightspeed Commerce go up and down completely randomly.

Pair Corralation between Unity Software and Lightspeed Commerce

Taking into account the 90-day investment horizon Unity Software is expected to generate 1.6 times more return on investment than Lightspeed Commerce. However, Unity Software is 1.6 times more volatile than Lightspeed Commerce. It trades about 0.17 of its potential returns per unit of risk. Lightspeed Commerce is currently generating about 0.2 per unit of risk. If you would invest  2,231  in Unity Software on April 29, 2025 and sell it today you would earn a total of  1,046  from holding Unity Software or generate 46.88% return on investment over 90 days.

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

Unity Software  vs.  Lightspeed Commerce

Unity Software

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Unity Software are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Unity Software unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 rather weak basic indicators, Lightspeed Commerce exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Unity Software and Lightspeed Commerce

The main advantage of trading using opposite Unity Software and Lightspeed Commerce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unity Software 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 Unity Software 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.