Correlation Between Lesaka Technologies and Fortress Income

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Can any of the company-specific risk be diversified away by investing in both Lesaka Technologies and Fortress Income 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 Lesaka Technologies and Fortress Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesaka Technologies and Fortress Income, you can compare the effects of market volatilities on Lesaka Technologies and Fortress Income 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 Lesaka Technologies with a short position of Fortress Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesaka Technologies and Fortress Income.

Diversification Opportunities for Lesaka Technologies and Fortress Income

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Lesaka and Fortress is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Fortress Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortress Income and Lesaka Technologies 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 Lesaka Technologies are associated (or correlated) with Fortress Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortress Income has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and Fortress Income go up and down completely randomly.

Pair Corralation between Lesaka Technologies and Fortress Income

Assuming the 90 days trading horizon Lesaka Technologies is expected to generate 2.94 times less return on investment than Fortress Income. But when comparing it to its historical volatility, Lesaka Technologies is 1.77 times less risky than Fortress Income. It trades about 0.05 of its potential returns per unit of risk. Fortress Income is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  69,600  in Fortress Income on September 14, 2024 and sell it today you would earn a total of  130,400  from holding Fortress Income or generate 187.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lesaka Technologies  vs.  Fortress Income

 Performance 
       Timeline  
Lesaka Technologies 

Risk-Adjusted Performance

6 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Lesaka Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Lesaka Technologies exhibited solid returns over the last few months and may actually be approaching a breakup point.
Fortress Income 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fortress Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Fortress Income is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Lesaka Technologies and Fortress Income Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lesaka Technologies and Fortress Income

The main advantage of trading using opposite Lesaka Technologies and Fortress Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesaka Technologies position performs unexpectedly, Fortress Income 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 Fortress Income will offset losses from the drop in Fortress Income's long position.
The idea behind Lesaka Technologies and Fortress Income 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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