Correlation Between Lesaka Technologies and DigiAsia Corp

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

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

Diversification Opportunities for Lesaka Technologies and DigiAsia Corp

-0.5

Correlation Coefficient

Lesaka Technologies  DigiAsia Corp

Very good diversification

The 3 months correlation between Lesaka and DigiAsia is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Lesaka Technologies and DigiAsia Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DigiAsia Corp 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 DigiAsia Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DigiAsia Corp has no effect on the direction of Lesaka Technologies i.e., Lesaka Technologies and DigiAsia Corp go up and down completely randomly.

Pair Corralation between Lesaka Technologies and DigiAsia Corp

Given the investment horizon of 90 days Lesaka Technologies is expected to generate 0.14 times more return on investment than DigiAsia Corp. However, Lesaka Technologies is 7.27 times less risky than DigiAsia Corp. It trades about 0.06 of its potential returns per unit of risk. DigiAsia Corp is currently generating about -0.14 per unit of risk. If you would invest  489.00  in Lesaka Technologies on September 27, 2024 and sell it today you would earn a total of  27.00  from holding Lesaka Technologies or generate 5.52% return on investment over 90 days.

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

Lesaka Technologies  vs.  DigiAsia Corp

Lesaka Technologies

Risk-Adjusted Performance

5 of 100

Insignificant

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 persistent basic indicators, Lesaka Technologies is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

DigiAsia Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DigiAsia Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Lesaka Technologies and DigiAsia Corp

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

The idea behind Lesaka Technologies and DigiAsia Corp 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.