Correlation Between Lesaka Technologies and Usio

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

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

Diversification Opportunities for Lesaka Technologies and Usio

0.07

Correlation Coefficient

Lesaka Technologies  Usio

Significant diversification

The 3 months correlation between Lesaka and Usio is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Usio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Usio Inc 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 Usio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Usio Inc has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and Usio go up and down completely randomly.

Pair Corralation between Lesaka Technologies and Usio

Given the investment horizon of 90 days Lesaka Technologies is expected to generate 0.77 times more return on investment than Usio. However, Lesaka Technologies is 1.29 times less risky than Usio. It trades about 0.03 of its potential returns per unit of risk. Usio Inc is currently generating about 0.01 per unit of risk. If you would invest  432.00  in Lesaka Technologies on September 26, 2024 and sell it today you would earn a total of  84.00  from holding Lesaka Technologies or generate 19.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Lesaka Technologies  vs.  Usio Inc

Lesaka Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Lesaka Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Usio Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Usio Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy forward indicators, Usio is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Lesaka Technologies and Usio

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

The idea behind Lesaka Technologies and Usio Inc 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.