Correlation Between Lesaka Technologies and S A P
Can any of the company-specific risk be diversified away by investing in both Lesaka Technologies and S A P 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 S A P into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesaka Technologies and Sappi, you can compare the effects of market volatilities on Lesaka Technologies and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesaka Technologies and S A P.
Diversification Opportunities for Lesaka Technologies and S A P
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lesaka and SAP is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Sappi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappi 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappi has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and S A P go up and down completely randomly.
Pair Corralation between Lesaka Technologies and S A P
Assuming the 90 days trading horizon Lesaka Technologies is expected to generate 1.22 times more return on investment than S A P. However, Lesaka Technologies is 1.22 times more volatile than Sappi. It trades about 0.09 of its potential returns per unit of risk. Sappi is currently generating about 0.11 per unit of risk. 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 Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Lesaka Technologies vs. Sappi
Performance |
| Timeline |
| Lesaka Technologies |
| Sappi |
Lesaka Technologies and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lesaka Technologies and S A P
The main advantage of trading using opposite Lesaka Technologies and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesaka Technologies position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.| Lesaka Technologies vs. Bytes Technology | Lesaka Technologies vs. Sasol Ltd Bee | Lesaka Technologies vs. Growthpoint Properties | Lesaka Technologies vs. AfricaRhodium ETF |
| S A P vs. Sasol Ltd Bee | S A P vs. Growthpoint Properties | S A P vs. AfricaRhodium ETF | S A P vs. CoreShares Preference Share |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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