Correlation Between Sasol and Pick N

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

Diversification Opportunities for Sasol and Pick N

-0.77

Correlation Coefficient

Sasol  Pick N

Pay attention - limited upside

The 3 months correlation between Sasol and Pick is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Pick N Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick N Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick N Pay has no effect on the direction of Sasol i.e., Sasol and Pick N go up and down completely randomly.

Pair Corralation between Sasol and Pick N

Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Pick N. But the etf apears to be less risky and, when comparing its historical volatility, Sasol Ltd Bee is 1.08 times less risky than Pick N. The etf trades about -0.18 of its potential returns per unit of risk. The Pick N Pay is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  236,100  in Pick N Pay on September 15, 2024 and sell it today you would earn a total of  74,000  from holding Pick N Pay or generate 31.34% 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.  Pick N Pay

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 weak 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.

Pick N Pay

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pick N Pay are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Pick N exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sasol and Pick N

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

The idea behind Sasol Ltd Bee and Pick N Pay 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.