Correlation Between Brimstone Investment and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both Brimstone Investment and Lesaka Technologies 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 Brimstone Investment and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brimstone Investment and Lesaka Technologies, you can compare the effects of market volatilities on Brimstone Investment and Lesaka Technologies 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 Brimstone Investment with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brimstone Investment and Lesaka Technologies.
Diversification Opportunities for Brimstone Investment and Lesaka Technologies
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brimstone and Lesaka is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Brimstone Investment and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and Brimstone Investment 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 Brimstone Investment are associated (or correlated) with Lesaka Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lesaka Technologies has no effect on the direction of Brimstone Investment i.e., Brimstone Investment and Lesaka Technologies go up and down completely randomly.
Pair Corralation between Brimstone Investment and Lesaka Technologies
Assuming the 90 days trading horizon Brimstone Investment is expected to generate 3.03 times less return on investment than Lesaka Technologies. In addition to that, Brimstone Investment is 1.8 times more volatile than Lesaka Technologies. It trades about 0.02 of its total potential returns per unit of risk. Lesaka Technologies is currently generating about 0.09 per unit of volatility. If you would invest 911,600 in Lesaka Technologies on September 1, 2024 and sell it today you would earn a total of 48,300 from holding Lesaka Technologies or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brimstone Investment vs. Lesaka Technologies
Performance |
| Timeline |
| Brimstone Investment |
| Lesaka Technologies |
Brimstone Investment and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brimstone Investment and Lesaka Technologies
The main advantage of trading using opposite Brimstone Investment and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brimstone Investment position performs unexpectedly, Lesaka Technologies 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 Lesaka Technologies will offset losses from the drop in Lesaka Technologies' long position.| Brimstone Investment vs. Tiger Brands | Brimstone Investment vs. Avi | Brimstone Investment vs. RCL Foods | Brimstone Investment vs. Oceana |
| Lesaka Technologies vs. Bytes Technology | Lesaka Technologies vs. Sasol Ltd Bee | Lesaka Technologies vs. Growthpoint Properties | Lesaka Technologies vs. AfricaRhodium ETF |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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