Correlation Between ODDITY Tech and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both ODDITY Tech 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 ODDITY Tech and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ODDITY Tech Ltd and Lesaka Technologies, you can compare the effects of market volatilities on ODDITY Tech 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 ODDITY Tech with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of ODDITY Tech and Lesaka Technologies.
Diversification Opportunities for ODDITY Tech and Lesaka Technologies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ODDITY and Lesaka is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding ODDITY Tech Ltd and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and ODDITY Tech 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 ODDITY Tech Ltd 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 ODDITY Tech i.e., ODDITY Tech and Lesaka Technologies go up and down completely randomly.
Pair Corralation between ODDITY Tech and Lesaka Technologies
Considering the 90-day investment horizon ODDITY Tech Ltd is expected to generate 2.44 times more return on investment than Lesaka Technologies. However, ODDITY Tech is 2.44 times more volatile than Lesaka Technologies. It trades about 0.24 of its potential returns per unit of risk. Lesaka Technologies is currently generating about -0.07 per unit of risk. If you would invest 3,970 in ODDITY Tech Ltd on August 28, 2024 and sell it today you would earn a total of 835.00 from holding ODDITY Tech Ltd or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ODDITY Tech Ltd vs. Lesaka Technologies
Performance |
| Timeline |
| ODDITY Tech |
| Lesaka Technologies |
ODDITY Tech and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ODDITY Tech and Lesaka Technologies
The main advantage of trading using opposite ODDITY Tech and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ODDITY Tech 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.| ODDITY Tech vs. Colgate Palmolive | ODDITY Tech vs. Estee Lauder Companies | ODDITY Tech vs. Procter Gamble | ODDITY Tech vs. United Guardian |
| Lesaka Technologies vs. Priority Technology Holdings | Lesaka Technologies vs. CSG Systems International | Lesaka Technologies vs. OneSpan | Lesaka Technologies vs. Sangoma Technologies Corp |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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