Correlation Between Sasol and Coronation Property

Can any of the company-specific risk be diversified away by investing in both Sasol and Coronation Property 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 Coronation Property 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 Coronation Property Equity, you can compare the effects of market volatilities on Sasol and Coronation Property 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 Coronation Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Coronation Property.

Diversification Opportunities for Sasol and Coronation Property

0.14

Correlation Coefficient

Sasol  Coronation Property

Average diversification

The 3 months correlation between Sasol and Coronation is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Coronation Property Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Property 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 Coronation Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Property has no effect on the direction of Sasol i.e., Sasol and Coronation Property go up and down completely randomly.

Pair Corralation between Sasol and Coronation Property

Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Coronation Property. In addition to that, Sasol is 6.93 times more volatile than Coronation Property Equity. It trades about -0.02 of its total potential returns per unit of risk. Coronation Property Equity is currently generating about 0.06 per unit of volatility. If you would invest  3,458  in Coronation Property Equity on December 5, 2024 and sell it today you would earn a total of  389.00  from holding Coronation Property Equity or generate 11.25% return on investment over 90 days.

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

Sasol Ltd Bee  vs.  Coronation Property Equity

Sasol Ltd Bee

Risk-Adjusted Performance

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 somewhat unsteady fundamental drivers, Sasol may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Coronation Property

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coronation Property Equity has generated negative risk-adjusted returns adding no value to fund investors. Despite latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Sasol and Coronation Property

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

The idea behind Sasol Ltd Bee and Coronation Property Equity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.