Correlation Between HomeChoice Investments and Sasol
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By analyzing existing cross correlation between HomeChoice Investments and Sasol Ltd Bee, you can compare the effects of market volatilities on HomeChoice Investments 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 HomeChoice Investments with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of HomeChoice Investments and Sasol.
Diversification Opportunities for HomeChoice Investments and Sasol
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between HomeChoice and Sasol is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding HomeChoice Investments 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 HomeChoice Investments 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 HomeChoice Investments 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 HomeChoice Investments i.e., HomeChoice Investments and Sasol go up and down completely randomly.
Pair Corralation between HomeChoice Investments and Sasol
Assuming the 90 days trading horizon HomeChoice Investments is expected to generate 1.57 times more return on investment than Sasol. However, HomeChoice Investments is 1.57 times more volatile than Sasol Ltd Bee. It trades about -0.2 of its potential returns per unit of risk. Sasol Ltd Bee is currently generating about -0.32 per unit of risk. If you would invest 380,000 in HomeChoice Investments on August 31, 2024 and sell it today you would lose (80,000) from holding HomeChoice Investments or give up 21.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HomeChoice Investments vs. Sasol Ltd Bee
Performance |
| Timeline |
| HomeChoice Investments |
| Sasol Ltd Bee |
HomeChoice Investments and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HomeChoice Investments and Sasol
The main advantage of trading using opposite HomeChoice Investments and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeChoice Investments 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.| HomeChoice Investments vs. British American Tobacco | HomeChoice Investments vs. E Media Holdings | HomeChoice Investments vs. We Buy Cars | HomeChoice Investments vs. eMedia Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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