Correlation Between Sasol and Schroder European
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By analyzing existing cross correlation between Sasol Ltd Bee and Schroder European Real, you can compare the effects of market volatilities on Sasol and Schroder European 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 Schroder European. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Schroder European.
Diversification Opportunities for Sasol and Schroder European
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sasol and Schroder is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Schroder European Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroder European Real 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 Schroder European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroder European Real has no effect on the direction of Sasol i.e., Sasol and Schroder European go up and down completely randomly.
Pair Corralation between Sasol and Schroder European
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Schroder European. But the etf apears to be less risky and, when comparing its historical volatility, Sasol Ltd Bee is 1.2 times less risky than Schroder European. The etf trades about -0.32 of its potential returns per unit of risk. The Schroder European Real is currently generating about -0.22 of returns per unit of risk over similar time horizon. If you would invest 199,400 in Schroder European Real on September 3, 2024 and sell it today you would lose (34,400) from holding Schroder European Real or give up 17.25% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.24% |
Values | Daily Returns |
Sasol Ltd Bee vs. Schroder European Real
Performance |
Timeline |
Sasol Ltd Bee |
Schroder European Real |
Sasol and Schroder European Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sasol and Schroder European
The main advantage of trading using opposite Sasol and Schroder European positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Schroder European 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 Schroder European will offset losses from the drop in Schroder European's long position.The idea behind Sasol Ltd Bee and Schroder European Real 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.Schroder European vs. Sasol Ltd Bee | Schroder European vs. Centaur Bci Balanced | Schroder European vs. Sabvest Capital | Schroder European 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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