Correlation Between Sasol and Custodian BCI
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By analyzing existing cross correlation between Sasol Ltd Bee and Custodian BCI Balanced, you can compare the effects of market volatilities on Sasol and Custodian BCI 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 Custodian BCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Custodian BCI.
Diversification Opportunities for Sasol and Custodian BCI
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sasol and Custodian is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Custodian BCI Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Custodian BCI Balanced 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 Custodian BCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Custodian BCI Balanced has no effect on the direction of Sasol i.e., Sasol and Custodian BCI go up and down completely randomly.
Pair Corralation between Sasol and Custodian BCI
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Custodian BCI. In addition to that, Sasol is 4.55 times more volatile than Custodian BCI Balanced. It trades about -0.06 of its total potential returns per unit of risk. Custodian BCI Balanced is currently generating about 0.1 per unit of volatility. If you would invest 232.00 in Custodian BCI Balanced on September 12, 2024 and sell it today you would earn a total of 41.00 from holding Custodian BCI Balanced or generate 17.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Sasol Ltd Bee vs. Custodian BCI Balanced
Performance |
| Timeline |
| Sasol Ltd Bee |
| Custodian BCI Balanced |
Sasol and Custodian BCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Custodian BCI
The main advantage of trading using opposite Sasol and Custodian BCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Custodian BCI 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 Custodian BCI will offset losses from the drop in Custodian BCI's long position.The idea behind Sasol Ltd Bee and Custodian BCI Balanced 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.| Custodian BCI vs. 4d Bci Moderate | Custodian BCI vs. Coronation Global Optimum | Custodian BCI vs. Absa Multi managed Absolute | Custodian BCI vs. Coronation Balanced Plus |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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