Correlation Between Lesaka Technologies and SLM Corp
Can any of the company-specific risk be diversified away by investing in both Lesaka Technologies and SLM Corp 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 SLM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesaka Technologies and Sanlam, you can compare the effects of market volatilities on Lesaka Technologies and SLM Corp 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 SLM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesaka Technologies and SLM Corp.
Diversification Opportunities for Lesaka Technologies and SLM Corp
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Lesaka and SLM is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Sanlam in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM Corp 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 SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and SLM Corp go up and down completely randomly.
Pair Corralation between Lesaka Technologies and SLM Corp
Assuming the 90 days trading horizon Lesaka Technologies is expected to generate 2.56 times more return on investment than SLM Corp. However, Lesaka Technologies is 2.56 times more volatile than Sanlam. It trades about 0.05 of its potential returns per unit of risk. Sanlam is currently generating about 0.1 per unit of risk. If you would invest 680,000 in Lesaka Technologies on September 4, 2024 and sell it today you would earn a total of 245,300 from holding Lesaka Technologies or generate 36.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lesaka Technologies vs. Sanlam
Performance |
| Timeline |
| Lesaka Technologies |
| SLM Corp |
Lesaka Technologies and SLM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lesaka Technologies and SLM Corp
The main advantage of trading using opposite Lesaka Technologies and SLM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesaka Technologies position performs unexpectedly, SLM Corp 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 SLM Corp will offset losses from the drop in SLM Corp's long position.| Lesaka Technologies vs. Bytes Technology | Lesaka Technologies vs. Sasol Ltd Bee | Lesaka Technologies vs. Centaur Bci Balanced | Lesaka Technologies vs. Growthpoint Properties |
| SLM Corp vs. Harmony Gold Mining | SLM Corp vs. Kumba Iron Ore | SLM Corp vs. Frontier Transport Holdings | SLM Corp vs. Datatec |
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.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |