Correlation Between Stewart Information and Datatec

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

By analyzing existing cross correlation between Stewart Information Services and Datatec Limited, you can compare the effects of market volatilities on Stewart Information and Datatec 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 Stewart Information with a short position of Datatec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stewart Information and Datatec.

Diversification Opportunities for Stewart Information and Datatec

-0.04

Correlation Coefficient

Stewart Information  Datatec

Good diversification

The 3 months correlation between Stewart and Datatec is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Stewart Information Services and Datatec Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datatec Limited and Stewart Information 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 Stewart Information Services are associated (or correlated) with Datatec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datatec Limited has no effect on the direction of Stewart Information i.e., Stewart Information and Datatec go up and down completely randomly.

Pair Corralation between Stewart Information and Datatec

Considering the 90-day investment horizon Stewart Information is expected to generate 3.67 times less return on investment than Datatec. But when comparing it to its historical volatility, Stewart Information Services is 1.39 times less risky than Datatec. It trades about 0.06 of its potential returns per unit of risk. Datatec Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  686.00  in Datatec Limited on August 28, 2025 and sell it today you would earn a total of  214.00  from holding Datatec Limited or generate 31.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Stewart Information Services  vs.  Datatec Limited

Stewart Information

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Stewart Information Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Stewart Information may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Datatec Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datatec Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Datatec showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stewart Information and Datatec

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

The idea behind Stewart Information Services and Datatec Limited 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.