Correlation Between City Lodge and Sasol
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By analyzing existing cross correlation between City Lodge Hotels and Sasol Ltd Bee, you can compare the effects of market volatilities on City Lodge 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 City Lodge with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of City Lodge and Sasol.
Diversification Opportunities for City Lodge and Sasol
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between City and Sasol is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding City Lodge Hotels 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 City Lodge 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 City Lodge Hotels 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 City Lodge i.e., City Lodge and Sasol go up and down completely randomly.
Pair Corralation between City Lodge and Sasol
Assuming the 90 days trading horizon City Lodge Hotels is expected to generate 0.34 times more return on investment than Sasol. However, City Lodge Hotels is 2.91 times less risky than Sasol. It trades about 0.31 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 48,000 in City Lodge Hotels on September 12, 2024 and sell it today you would earn a total of 3,400 from holding City Lodge Hotels or generate 7.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
City Lodge Hotels vs. Sasol Ltd Bee
Performance |
| Timeline |
| City Lodge Hotels |
| Sasol Ltd Bee |
City Lodge and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City Lodge and Sasol
The main advantage of trading using opposite City Lodge and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City Lodge 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.| City Lodge vs. British American Tobacco | City Lodge vs. Glencore PLC | City Lodge vs. Anglo American PLC | City Lodge vs. ABSA Bank Limited |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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