Correlation Between VHAI and Lesaka Technologies

Can any of the company-specific risk be diversified away by investing in both VHAI 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 VHAI and Lesaka Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between VHAI and Lesaka Technologies, you can compare the effects of market volatilities on VHAI 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 VHAI with a short position of Lesaka Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of VHAI and Lesaka Technologies.

Diversification Opportunities for VHAI and Lesaka Technologies

-0.83

Correlation Coefficient

VHAI  Lesaka Technologies

Pay attention - limited upside

The 3 months correlation between VHAI and Lesaka is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding VHAI and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and VHAI 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 VHAI 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 VHAI i.e., VHAI and Lesaka Technologies go up and down completely randomly.

Pair Corralation between VHAI and Lesaka Technologies

Given the investment horizon of 90 days VHAI is expected to under-perform the Lesaka Technologies. In addition to that, VHAI is 4.54 times more volatile than Lesaka Technologies. It trades about -0.23 of its total potential returns per unit of risk. Lesaka Technologies is currently generating about 0.04 per unit of volatility. If you would invest  455.00  in Lesaka Technologies on August 9, 2024 and sell it today you would earn a total of  100.00  from holding Lesaka Technologies or generate 21.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	54.1%
Values	Daily Returns

VHAI  vs.  Lesaka Technologies

VHAI

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VHAI has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Lesaka Technologies

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lesaka Technologies are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Lesaka Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VHAI and Lesaka Technologies

The main advantage of trading using opposite VHAI and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VHAI 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.

The idea behind VHAI and Lesaka Technologies pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.