Correlation Between Sasol and NewWave Silver
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By analyzing existing cross correlation between Sasol Ltd Bee and NewWave Silver Exchange, you can compare the effects of market volatilities on Sasol and NewWave Silver 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 NewWave Silver. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and NewWave Silver.
Diversification Opportunities for Sasol and NewWave Silver
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sasol and NewWave is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and NewWave Silver Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewWave Silver Exchange 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 NewWave Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewWave Silver Exchange has no effect on the direction of Sasol i.e., Sasol and NewWave Silver go up and down completely randomly.
Pair Corralation between Sasol and NewWave Silver
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the NewWave Silver. In addition to that, Sasol is 4.33 times more volatile than NewWave Silver Exchange. It trades about -0.03 of its total potential returns per unit of risk. NewWave Silver Exchange is currently generating about 0.02 per unit of volatility. If you would invest 53,900 in NewWave Silver Exchange on November 28, 2024 and sell it today you would earn a total of 2,000 from holding NewWave Silver Exchange or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sasol Ltd Bee vs. NewWave Silver Exchange
Performance |
| Timeline |
| Sasol Ltd Bee |
| NewWave Silver Exchange |
Sasol and NewWave Silver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and NewWave Silver
The main advantage of trading using opposite Sasol and NewWave Silver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, NewWave Silver 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 NewWave Silver will offset losses from the drop in NewWave Silver's long position.The idea behind Sasol Ltd Bee and NewWave Silver Exchange 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.| NewWave Silver vs. NewWave Platinum Exchange | NewWave Silver vs. NewWave USD Currency | NewWave Silver vs. NewWave EUR Currency | NewWave Silver vs. NewWave GBP Currency |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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