Correlation Between Libstar Holdings and Sasol
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By analyzing existing cross correlation between Libstar Holdings and Sasol Ltd Bee, you can compare the effects of market volatilities on Libstar Holdings 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 Libstar Holdings with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Libstar Holdings and Sasol.
Diversification Opportunities for Libstar Holdings and Sasol
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Libstar and Sasol is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Libstar Holdings 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 Libstar Holdings 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 Libstar Holdings 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 Libstar Holdings i.e., Libstar Holdings and Sasol go up and down completely randomly.
Pair Corralation between Libstar Holdings and Sasol
Assuming the 90 days trading horizon Libstar Holdings is expected to generate 0.95 times more return on investment than Sasol. However, Libstar Holdings is 1.05 times less risky than Sasol. It trades about -0.21 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 47,800 in Libstar Holdings on September 12, 2024 and sell it today you would lose (6,200) from holding Libstar Holdings or give up 12.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Libstar Holdings vs. Sasol Ltd Bee
Performance |
| Timeline |
| Libstar Holdings |
| Sasol Ltd Bee |
Libstar Holdings and Sasol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Libstar Holdings and Sasol
The main advantage of trading using opposite Libstar Holdings and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Libstar Holdings 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.| Libstar Holdings vs. HomeChoice Investments | Libstar Holdings vs. Standard Bank Group | Libstar Holdings vs. Deneb Investments | Libstar Holdings vs. Hosken Consolidated Investments |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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