Correlation Between RCL Foods and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both RCL Foods 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 RCL Foods and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCL Foods and Lesaka Technologies, you can compare the effects of market volatilities on RCL Foods 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 RCL Foods with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCL Foods and Lesaka Technologies.
Diversification Opportunities for RCL Foods and Lesaka Technologies
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RCL and Lesaka is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RCL Foods and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and RCL Foods 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 RCL Foods 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 RCL Foods i.e., RCL Foods and Lesaka Technologies go up and down completely randomly.
Pair Corralation between RCL Foods and Lesaka Technologies
Assuming the 90 days trading horizon RCL Foods is expected to generate 0.35 times more return on investment than Lesaka Technologies. However, RCL Foods is 2.87 times less risky than Lesaka Technologies. It trades about 0.0 of its potential returns per unit of risk. Lesaka Technologies is currently generating about -0.03 per unit of risk. If you would invest 91,000 in RCL Foods on August 28, 2024 and sell it today you would earn a total of 0.00 from holding RCL Foods or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCL Foods vs. Lesaka Technologies
Performance |
| Timeline |
| RCL Foods |
| Lesaka Technologies |
RCL Foods and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCL Foods and Lesaka Technologies
The main advantage of trading using opposite RCL Foods and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCL Foods 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.| RCL Foods vs. Standard Bank Group | RCL Foods vs. Ascendis Health | RCL Foods vs. City Lodge Hotels | RCL Foods vs. Advtech |
| Lesaka Technologies vs. Centaur Bci Balanced | Lesaka Technologies vs. Growthpoint Properties | Lesaka Technologies vs. Bowler Metcalf | Lesaka Technologies vs. Shoprite Holdings |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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