Correlation Between Bid and Sasol
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By analyzing existing cross correlation between Bid Corporation and Sasol Ltd Bee, you can compare the effects of market volatilities on Bid 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 Bid with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bid and Sasol.
Diversification Opportunities for Bid and Sasol
Very good diversification
The 3 months correlation between Bid and Sasol is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Bid Corp. 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 Bid 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 Bid Corporation 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 Bid i.e., Bid and Sasol go up and down completely randomly.
Pair Corralation between Bid and Sasol
Assuming the 90 days trading horizon Bid Corporation is expected to generate 0.56 times more return on investment than Sasol. However, Bid Corporation is 1.79 times less risky than Sasol. It trades about 0.17 of its potential returns per unit of risk. Sasol Ltd Bee is currently generating about -0.3 per unit of risk. If you would invest 4,202,100 in Bid Corporation on September 5, 2024 and sell it today you would earn a total of 271,100 from holding Bid Corporation or generate 6.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bid Corp. vs. Sasol Ltd Bee
Performance |
| Timeline |
| Bid Corporation |
| Sasol Ltd Bee |
Bid and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bid and Sasol
The main advantage of trading using opposite Bid and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bid 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.| Bid vs. Sasol Ltd Bee | Bid vs. Centaur Bci Balanced | Bid vs. Sabvest Capital | Bid vs. Growthpoint Properties |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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