Correlation Between Lesaka Technologies and Secureworks Corp

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

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

Diversification Opportunities for Lesaka Technologies and Secureworks Corp

-0.65

Correlation Coefficient

Lesaka Technologies  Secureworks Corp

Excellent diversification

The 3 months correlation between Lesaka and Secureworks is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Secureworks Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secureworks Corp 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 Secureworks Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secureworks Corp has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and Secureworks Corp go up and down completely randomly.

Pair Corralation between Lesaka Technologies and Secureworks Corp

Given the investment horizon of 90 days Lesaka Technologies is expected to under-perform the Secureworks Corp. In addition to that, Lesaka Technologies is 19.47 times more volatile than Secureworks Corp. It trades about -0.03 of its total potential returns per unit of risk. Secureworks Corp is currently generating about 0.26 per unit of volatility. If you would invest  845.00  in Secureworks Corp on December 30, 2024 and sell it today you would earn a total of  6.00  from holding Secureworks Corp or generate 0.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	37.1%
Values	Daily Returns

Lesaka Technologies  vs.  Secureworks Corp

Lesaka Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lesaka Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Lesaka Technologies is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Secureworks Corp

Risk-Adjusted Performance

Solid

Over the last 90 days Secureworks Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Secureworks Corp is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Lesaka Technologies and Secureworks Corp

The main advantage of trading using opposite Lesaka Technologies and Secureworks Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lesaka Technologies position performs unexpectedly, Secureworks Corp 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 Secureworks Corp will offset losses from the drop in Secureworks Corp's long position.

The idea behind Lesaka Technologies and Secureworks Corp 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..