Correlation Between Sasol and Coronation Industrial
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By analyzing existing cross correlation between Sasol Ltd Bee and Coronation Industrial, you can compare the effects of market volatilities on Sasol and Coronation Industrial 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 Coronation Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Coronation Industrial.
Diversification Opportunities for Sasol and Coronation Industrial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sasol and Coronation is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Coronation Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronation Industrial 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 Ltd Bee are associated (or correlated) with Coronation Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronation Industrial has no effect on the direction of Sasol i.e., Sasol and Coronation Industrial go up and down completely randomly.
Pair Corralation between Sasol and Coronation Industrial
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Coronation Industrial. In addition to that, Sasol is 6.58 times more volatile than Coronation Industrial. It trades about -0.31 of its total potential returns per unit of risk. Coronation Industrial is currently generating about 0.03 per unit of volatility. If you would invest 28,578 in Coronation Industrial on September 2, 2024 and sell it today you would earn a total of 84.00 from holding Coronation Industrial or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sasol Ltd Bee vs. Coronation Industrial
Performance |
| Timeline |
| Sasol Ltd Bee |
| Coronation Industrial |
Sasol and Coronation Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Coronation Industrial
The main advantage of trading using opposite Sasol and Coronation Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Coronation Industrial 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 Coronation Industrial will offset losses from the drop in Coronation Industrial's long position.The idea behind Sasol Ltd Bee and Coronation Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Coronation Industrial vs. Sasol Ltd Bee | Coronation Industrial vs. Centaur Bci Balanced | Coronation Industrial vs. Sabvest Capital | Coronation Industrial 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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