Correlation Between Lesaka Technologies and Brait SE

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

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

Diversification Opportunities for Lesaka Technologies and Brait SE

0.47

Correlation Coefficient

Lesaka Technologies  Brait SE

Very weak diversification

The 3 months correlation between Lesaka and Brait is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and Brait SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brait SE 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 Brait SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brait SE has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and Brait SE go up and down completely randomly.

Pair Corralation between Lesaka Technologies and Brait SE

Assuming the 90 days trading horizon Lesaka Technologies is expected to under-perform the Brait SE. In addition to that, Lesaka Technologies is 1.59 times more volatile than Brait SE. It trades about -0.07 of its total potential returns per unit of risk. Brait SE is currently generating about -0.02 per unit of volatility. If you would invest  20,400  in Brait SE on December 22, 2024 and sell it today you would lose (400.00) from holding Brait SE or give up 1.96% of portfolio value over 90 days.

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

Lesaka Technologies  vs.  Brait SE

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. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Brait SE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brait SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Brait SE is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Lesaka Technologies and Brait SE

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

The idea behind Lesaka Technologies and Brait SE 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.