Correlation Between Allied Electronics and Sasol
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By analyzing existing cross correlation between Allied Electronics and Sasol Ltd Bee, you can compare the effects of market volatilities on Allied Electronics 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 Allied Electronics with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Allied Electronics and Sasol.
Diversification Opportunities for Allied Electronics and Sasol
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Allied and Sasol is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Allied Electronics and Sasol Ltd Bee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol Ltd Bee and Allied Electronics 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 Allied Electronics 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 Ltd Bee has no effect on the direction of Allied Electronics i.e., Allied Electronics and Sasol go up and down completely randomly.
Pair Corralation between Allied Electronics and Sasol
Assuming the 90 days trading horizon Allied Electronics is expected to generate 0.51 times more return on investment than Sasol. However, Allied Electronics is 1.94 times less risky than Sasol. It trades about 0.2 of its potential returns per unit of risk. Sasol Ltd Bee is currently generating about -0.31 per unit of risk. If you would invest 187,000 in Allied Electronics on September 5, 2024 and sell it today you would earn a total of 13,000 from holding Allied Electronics or generate 6.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Allied Electronics vs. Sasol Ltd Bee
Performance |
| Timeline |
| Allied Electronics |
| Sasol Ltd Bee |
Allied Electronics and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Allied Electronics and Sasol
The main advantage of trading using opposite Allied Electronics and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allied Electronics 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.| Allied Electronics vs. Blue Label Telecoms | Allied Electronics vs. HomeChoice Investments | Allied Electronics vs. CA Sales Holdings | Allied Electronics vs. Astral Foods |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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