Correlation Between Nano Magic and Sasol

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

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

Diversification Opportunities for Nano Magic and Sasol

0.0

Correlation Coefficient

Nano Magic  Sasol

Pay attention - limited upside

The 3 months correlation between Nano and Sasol is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nano Magic and Sasol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol and Nano Magic 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 Nano Magic are associated (or correlated) with Sasol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sasol has no effect on the direction of Nano Magic i.e., Nano Magic and Sasol go up and down completely randomly.

Pair Corralation between Nano Magic and Sasol

If you would invest (100.00) in Nano Magic on December 24, 2024 and sell it today you would earn a total of  100.00  from holding Nano Magic or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nano Magic  vs.  Sasol

Nano Magic

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nano Magic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Nano Magic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sasol

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sasol has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Pair Trading with Nano Magic and Sasol

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

The idea behind Nano Magic and Sasol 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.