Correlation Between EngageSmart LLC and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both EngageSmart LLC 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 EngageSmart LLC and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EngageSmart LLC and Lesaka Technologies, you can compare the effects of market volatilities on EngageSmart LLC 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 EngageSmart LLC with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of EngageSmart LLC and Lesaka Technologies.
Diversification Opportunities for EngageSmart LLC and Lesaka Technologies
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EngageSmart and Lesaka is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding EngageSmart LLC and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and EngageSmart LLC 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 EngageSmart LLC 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 EngageSmart LLC i.e., EngageSmart LLC and Lesaka Technologies go up and down completely randomly.
Pair Corralation between EngageSmart LLC and Lesaka Technologies
Given the investment horizon of 90 days EngageSmart LLC is expected to generate 0.8 times more return on investment than Lesaka Technologies. However, EngageSmart LLC is 1.24 times less risky than Lesaka Technologies. It trades about 0.06 of its potential returns per unit of risk. Lesaka Technologies is currently generating about 0.04 per unit of risk. If you would invest 1,557 in EngageSmart LLC on August 28, 2024 and sell it today you would earn a total of 288.00 from holding EngageSmart LLC or generate 18.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.72% |
| Values | Daily Returns |
EngageSmart LLC vs. Lesaka Technologies
Performance |
| Timeline |
| EngageSmart LLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Lesaka Technologies |
EngageSmart LLC and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EngageSmart LLC and Lesaka Technologies
The main advantage of trading using opposite EngageSmart LLC and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EngageSmart LLC 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.| EngageSmart LLC vs. Evertec | EngageSmart LLC vs. Couchbase | EngageSmart LLC vs. Flywire Corp | EngageSmart LLC vs. i3 Verticals |
| 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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