Correlation Between Sasol and Absa Multi
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By analyzing existing cross correlation between Sasol Ltd Bee and Absa Multi managed Absolute, you can compare the effects of market volatilities on Sasol and Absa Multi 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 Absa Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Absa Multi.
Diversification Opportunities for Sasol and Absa Multi
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sasol and Absa is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Absa Multi managed Absolute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Absa Multi managed 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 Absa Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Absa Multi managed has no effect on the direction of Sasol i.e., Sasol and Absa Multi go up and down completely randomly.
Pair Corralation between Sasol and Absa Multi
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Absa Multi. In addition to that, Sasol is 8.64 times more volatile than Absa Multi managed Absolute. It trades about -0.1 of its total potential returns per unit of risk. Absa Multi managed Absolute is currently generating about 0.13 per unit of volatility. If you would invest 141.00 in Absa Multi managed Absolute on September 5, 2024 and sell it today you would earn a total of 7.00 from holding Absa Multi managed Absolute or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Sasol Ltd Bee vs. Absa Multi managed Absolute
Performance |
| Timeline |
| Sasol Ltd Bee |
| Absa Multi managed |
Sasol and Absa Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Absa Multi
The main advantage of trading using opposite Sasol and Absa Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Absa Multi 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 Absa Multi will offset losses from the drop in Absa Multi's long position.The idea behind Sasol Ltd Bee and Absa Multi managed Absolute 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.| Absa Multi vs. Sasol Ltd Bee | Absa Multi vs. Centaur Bci Balanced | Absa Multi vs. Sabvest Capital | Absa Multi 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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