Correlation Between CCC Intelligent and Lesaka Technologies

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

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

Diversification Opportunities for CCC Intelligent and Lesaka Technologies

0.37

Correlation Coefficient

CCC Intelligent  Lesaka Technologies

Weak diversification

The 3 months correlation between CCC and Lesaka is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CCC Intelligent Solutions and Lesaka Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lesaka Technologies and CCC Intelligent 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 CCC Intelligent Solutions 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 CCC Intelligent i.e., CCC Intelligent and Lesaka Technologies go up and down completely randomly.

Pair Corralation between CCC Intelligent and Lesaka Technologies

Given the investment horizon of 90 days CCC Intelligent Solutions is expected to generate 0.58 times more return on investment than Lesaka Technologies. However, CCC Intelligent Solutions is 1.74 times less risky than Lesaka Technologies. It trades about 0.05 of its potential returns per unit of risk. Lesaka Technologies is currently generating about 0.03 per unit of risk. If you would invest  856.00  in CCC Intelligent Solutions on September 18, 2024 and sell it today you would earn a total of  367.00  from holding CCC Intelligent Solutions or generate 42.87% return on investment over 90 days.

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

CCC Intelligent Solutions  vs.  Lesaka Technologies

CCC Intelligent Solutions

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CCC Intelligent Solutions are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, CCC Intelligent may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lesaka Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lesaka Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Lesaka Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CCC Intelligent and Lesaka Technologies

The main advantage of trading using opposite CCC Intelligent and Lesaka Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CCC Intelligent 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 CCC Intelligent Solutions 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.