Correlation Between Lesaka Technologies and We Buy
Can any of the company-specific risk be diversified away by investing in both Lesaka Technologies and We Buy 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 We Buy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lesaka Technologies and We Buy Cars, you can compare the effects of market volatilities on Lesaka Technologies and We Buy 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 We Buy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lesaka Technologies and We Buy.
Diversification Opportunities for Lesaka Technologies and We Buy
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lesaka and WBC is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and We Buy Cars in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on We Buy Cars 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 We Buy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of We Buy Cars has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and We Buy go up and down completely randomly.
Pair Corralation between Lesaka Technologies and We Buy
Assuming the 90 days trading horizon Lesaka Technologies is expected to generate 2.68 times less return on investment than We Buy. In addition to that, Lesaka Technologies is 1.76 times more volatile than We Buy Cars. It trades about 0.07 of its total potential returns per unit of risk. We Buy Cars is currently generating about 0.33 per unit of volatility. If you would invest 310,000 in We Buy Cars on August 28, 2024 and sell it today you would earn a total of 128,200 from holding We Buy Cars or generate 41.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lesaka Technologies vs. We Buy Cars
Performance |
| Timeline |
| Lesaka Technologies |
| We Buy Cars |
Lesaka Technologies and We Buy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lesaka Technologies and We Buy
The main advantage of trading using opposite Lesaka Technologies and We Buy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesaka Technologies position performs unexpectedly, We Buy 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 We Buy will offset losses from the drop in We Buy's long position.| Lesaka Technologies vs. Centaur Bci Balanced | Lesaka Technologies vs. Growthpoint Properties | Lesaka Technologies vs. Bowler Metcalf | Lesaka Technologies vs. Shoprite Holdings |
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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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