Correlation Between Lesaka Technologies and AuthID

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

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

Diversification Opportunities for Lesaka Technologies and AuthID

-0.25

Correlation Coefficient

Lesaka Technologies  AuthID

Very good diversification

The 3 months correlation between Lesaka and AuthID is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and authID Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on authID 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 AuthID. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of authID Inc has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and AuthID go up and down completely randomly.

Pair Corralation between Lesaka Technologies and AuthID

Given the investment horizon of 90 days Lesaka Technologies is expected to generate 0.31 times more return on investment than AuthID. However, Lesaka Technologies is 3.2 times less risky than AuthID. It trades about 0.1 of its potential returns per unit of risk. authID Inc is currently generating about -0.03 per unit of risk. If you would invest  455.00  in Lesaka Technologies on September 18, 2024 and sell it today you would earn a total of  51.00  from holding Lesaka Technologies or generate 11.21% return on investment over 90 days.

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

Lesaka Technologies  vs.  authID Inc

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.

authID Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days authID Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's forward indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Lesaka Technologies and AuthID

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

The idea behind Lesaka Technologies and authID 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.