Correlation Between We Buy and Lesaka Technologies
Can any of the company-specific risk be diversified away by investing in both We Buy 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 We Buy and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between We Buy Cars and Lesaka Technologies, you can compare the effects of market volatilities on We Buy 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 We Buy with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of We Buy and Lesaka Technologies.
Diversification Opportunities for We Buy and Lesaka Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WBC and Lesaka is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding We Buy Cars and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and We Buy 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 We Buy Cars 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 We Buy i.e., We Buy and Lesaka Technologies go up and down completely randomly.
Pair Corralation between We Buy and Lesaka Technologies
Assuming the 90 days trading horizon We Buy Cars is expected to generate 0.61 times more return on investment than Lesaka Technologies. However, We Buy Cars is 1.64 times less risky than Lesaka Technologies. It trades about 0.63 of its potential returns per unit of risk. Lesaka Technologies is currently generating about -0.03 per unit of risk. If you would invest 351,900 in We Buy Cars on August 28, 2024 and sell it today you would earn a total of 86,300 from holding We Buy Cars or generate 24.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
We Buy Cars vs. Lesaka Technologies
Performance |
| Timeline |
| We Buy Cars |
| Lesaka Technologies |
We Buy and Lesaka Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with We Buy and Lesaka Technologies
The main advantage of trading using opposite We Buy and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if We Buy 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.| We Buy vs. eMedia Holdings Limited | We Buy vs. Deneb Investments | We Buy vs. Hosken Consolidated Investments | We Buy vs. Astoria Investments |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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