Correlation Between Perimeter Solutions and Sasol

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

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

Diversification Opportunities for Perimeter Solutions and Sasol

0.73

Correlation Coefficient

Perimeter Solutions  Sasol

Poor diversification

The 3 months correlation between Perimeter and Sasol is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Solutions SA and Sasol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol and Perimeter Solutions 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 Perimeter Solutions SA 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 Perimeter Solutions i.e., Perimeter Solutions and Sasol go up and down completely randomly.

Pair Corralation between Perimeter Solutions and Sasol

Considering the 90-day investment horizon Perimeter Solutions SA is expected to generate 0.85 times more return on investment than Sasol. However, Perimeter Solutions SA is 1.17 times less risky than Sasol. It trades about 0.06 of its potential returns per unit of risk. Sasol is currently generating about -0.07 per unit of risk. If you would invest  762.00  in Perimeter Solutions SA on December 28, 2024 and sell it today you would earn a total of  264.00  from holding Perimeter Solutions SA or generate 34.65% return on investment over 90 days.

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

Perimeter Solutions SA  vs.  Sasol

Perimeter Solutions

Risk-Adjusted Performance

Very Weak

Over the last 90 days Perimeter Solutions SA 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 very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm 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 quite persistent basic indicators, Sasol is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Perimeter Solutions and Sasol

The main advantage of trading using opposite Perimeter Solutions and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Solutions 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 Perimeter Solutions SA 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.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.