Correlation Between Sasol and Sebata Holdings
Can any of the company-specific risk be diversified away by investing in both Sasol and Sebata Holdings 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 Sasol and Sebata Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sasol and Sebata Holdings, you can compare the effects of market volatilities on Sasol and Sebata Holdings 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 Sasol with a short position of Sebata Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Sebata Holdings.
Diversification Opportunities for Sasol and Sebata Holdings
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sasol and Sebata is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sasol and Sebata Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sebata Holdings and Sasol 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 Sasol are associated (or correlated) with Sebata Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sebata Holdings has no effect on the direction of Sasol i.e., Sasol and Sebata Holdings go up and down completely randomly.
Pair Corralation between Sasol and Sebata Holdings
Assuming the 90 days trading horizon Sasol is expected to under-perform the Sebata Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Sasol is 1.76 times less risky than Sebata Holdings. The stock trades about -0.18 of its potential returns per unit of risk. The Sebata Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 9,500 in Sebata Holdings on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Sebata Holdings or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sasol vs. Sebata Holdings
Performance |
| Timeline |
| Sasol |
| Sebata Holdings |
Sasol and Sebata Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Sebata Holdings
The main advantage of trading using opposite Sasol and Sebata Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Sebata Holdings 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 Sebata Holdings will offset losses from the drop in Sebata Holdings' long position.| Sasol vs. Astral Foods | Sasol vs. Frontier Transport Holdings | Sasol vs. Afine Investments | Sasol vs. HomeChoice Investments |
| Sebata Holdings vs. CA Sales Holdings | Sebata Holdings vs. Trematon Capital Investments | Sebata Holdings vs. Afine Investments | Sebata Holdings vs. Deneb 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |