Correlation Between Verint Systems and Lesaka Technologies

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

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

Diversification Opportunities for Verint Systems and Lesaka Technologies

-0.05

Correlation Coefficient

Verint Systems  Lesaka Technologies

Good diversification

The 3 months correlation between Verint and Lesaka is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Verint Systems and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and Verint Systems 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 Verint Systems 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 Verint Systems i.e., Verint Systems and Lesaka Technologies go up and down completely randomly.

Pair Corralation between Verint Systems and Lesaka Technologies

Given the investment horizon of 90 days Verint Systems is expected to under-perform the Lesaka Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Verint Systems is 1.03 times less risky than Lesaka Technologies. The stock trades about -0.52 of its potential returns per unit of risk. The Lesaka Technologies is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  530.00  in Lesaka Technologies on October 12, 2024 and sell it today you would lose (5.00) from holding Lesaka Technologies or give up 0.94% of portfolio value over 90 days.

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

Verint Systems  vs.  Lesaka Technologies

Verint Systems

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Verint Systems are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Verint Systems may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Lesaka Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lesaka Technologies are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent basic indicators, Lesaka Technologies may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Verint Systems and Lesaka Technologies

The main advantage of trading using opposite Verint Systems and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Verint Systems 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 Verint Systems 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.