Correlation Between Air Products and Sasol
Can any of the company-specific risk be diversified away by investing in both Air Products 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 Air Products and Sasol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Products and and Sasol, you can compare the effects of market volatilities on Air Products 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 Air Products with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Products and Sasol.
Diversification Opportunities for Air Products and Sasol
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Sasol is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Air Products and and Sasol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol and Air Products 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 Air Products and 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 Air Products i.e., Air Products and Sasol go up and down completely randomly.
Pair Corralation between Air Products and Sasol
Considering the 90-day investment horizon Air Products and is expected to generate 0.36 times more return on investment than Sasol. However, Air Products and is 2.79 times less risky than Sasol. It trades about 0.03 of its potential returns per unit of risk. Sasol is currently generating about -0.09 per unit of risk. If you would invest 32,662 in Air Products and on August 24, 2024 and sell it today you would earn a total of 226.00 from holding Air Products and or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Products and vs. Sasol
Performance |
| Timeline |
| Air Products |
| Sasol |
Air Products and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Products and Sasol
The main advantage of trading using opposite Air Products and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Products 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.| Air Products vs. Eshallgo Class A | Air Products vs. Amtech Systems | Air Products vs. Gold Fields Ltd | Air Products vs. Aegean Airlines SA |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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