Correlation Between Cemtrex and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both Cemtrex 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 Cemtrex and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cemtrex and Lesaka Technologies, you can compare the effects of market volatilities on Cemtrex 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 Cemtrex with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cemtrex and Lesaka Technologies.
Diversification Opportunities for Cemtrex and Lesaka Technologies
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cemtrex and Lesaka is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cemtrex and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and Cemtrex 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 Cemtrex 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 Cemtrex i.e., Cemtrex and Lesaka Technologies go up and down completely randomly.
Pair Corralation between Cemtrex and Lesaka Technologies
Given the investment horizon of 90 days Cemtrex is expected to under-perform the Lesaka Technologies. In addition to that, Cemtrex is 3.53 times more volatile than Lesaka Technologies. It trades about -0.19 of its total potential returns per unit of risk. Lesaka Technologies is currently generating about 0.05 per unit of volatility. If you would invest 383.00 in Lesaka Technologies on September 1, 2024 and sell it today you would earn a total of 157.00 from holding Lesaka Technologies or generate 40.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cemtrex vs. Lesaka Technologies
Performance |
| Timeline |
| Cemtrex |
| Lesaka Technologies |
Cemtrex and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cemtrex and Lesaka Technologies
The main advantage of trading using opposite Cemtrex and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cemtrex 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.The idea behind Cemtrex and Lesaka Technologies 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.| Lesaka Technologies vs. Priority Technology Holdings | Lesaka Technologies vs. CSG Systems International | Lesaka Technologies vs. OneSpan | Lesaka Technologies vs. Sangoma Technologies Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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