Correlation Between Sasol and Analytics

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

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

Diversification Opportunities for Sasol and Analytics

-0.68

Correlation Coefficient

Sasol  Analytics

Excellent diversification

The 3 months correlation between Sasol and Analytics is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Analytics Ci Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analytics Ci Balanced and Sasol 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 Sasol Ltd Bee are associated (or correlated) with Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analytics Ci Balanced has no effect on the direction of Sasol i.e., Sasol and Analytics go up and down completely randomly.

Pair Corralation between Sasol and Analytics

Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Analytics. In addition to that, Sasol is 5.18 times more volatile than Analytics Ci Balanced. It trades about -0.18 of its total potential returns per unit of risk. Analytics Ci Balanced is currently generating about 0.16 per unit of volatility. If you would invest  959.00  in Analytics Ci Balanced on September 14, 2024 and sell it today you would earn a total of  34.00  from holding Analytics Ci Balanced or generate 3.55% return on investment over 90 days.

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

Sasol Ltd Bee  vs.  Analytics Ci Balanced

Sasol Ltd Bee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sasol Ltd Bee has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Analytics Ci Balanced

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Analytics Ci Balanced are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Analytics is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sasol and Analytics

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

The idea behind Sasol Ltd Bee and Analytics Ci Balanced 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.