Correlation Between Frontier Transport and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both Frontier Transport 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 Frontier Transport and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Frontier Transport Holdings and Lesaka Technologies, you can compare the effects of market volatilities on Frontier Transport 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 Frontier Transport with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frontier Transport and Lesaka Technologies.
Diversification Opportunities for Frontier Transport and Lesaka Technologies
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Frontier and Lesaka is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Frontier Transport Holdings and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and Frontier Transport 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 Frontier Transport Holdings 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 Frontier Transport i.e., Frontier Transport and Lesaka Technologies go up and down completely randomly.
Pair Corralation between Frontier Transport and Lesaka Technologies
Assuming the 90 days trading horizon Frontier Transport is expected to generate 6.43 times less return on investment than Lesaka Technologies. But when comparing it to its historical volatility, Frontier Transport Holdings is 1.2 times less risky than Lesaka Technologies. It trades about 0.01 of its potential returns per unit of risk. Lesaka Technologies is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 903,100 in Lesaka Technologies on November 3, 2024 and sell it today you would earn a total of 16,900 from holding Lesaka Technologies or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Frontier Transport Holdings vs. Lesaka Technologies
Performance |
| Timeline |
| Frontier Transport |
| Lesaka Technologies |
Frontier Transport and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Frontier Transport and Lesaka Technologies
The main advantage of trading using opposite Frontier Transport and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Frontier Transport 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.| Frontier Transport vs. Lesaka Technologies | Frontier Transport vs. Blue Label Telecoms | Frontier Transport vs. Bytes Technology | Frontier Transport vs. Datatec |
| Lesaka Technologies vs. African Media Entertainment | Lesaka Technologies vs. Ascendis Health | Lesaka Technologies vs. Hosken Consolidated Investments | Lesaka Technologies vs. Astoria Investments |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |