Correlation Between Sasol and Tiger Brands
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By analyzing existing cross correlation between Sasol Ltd Bee and Tiger Brands, you can compare the effects of market volatilities on Sasol and Tiger Brands 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 Tiger Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Tiger Brands.
Diversification Opportunities for Sasol and Tiger Brands
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sasol and Tiger is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Tiger Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiger Brands 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 Tiger Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiger Brands has no effect on the direction of Sasol i.e., Sasol and Tiger Brands go up and down completely randomly.
Pair Corralation between Sasol and Tiger Brands
Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Tiger Brands. In addition to that, Sasol is 3.84 times more volatile than Tiger Brands. It trades about -0.35 of its total potential returns per unit of risk. Tiger Brands is currently generating about 0.18 per unit of volatility. If you would invest 2,380,000 in Tiger Brands on August 24, 2024 and sell it today you would earn a total of 74,800 from holding Tiger Brands or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sasol Ltd Bee vs. Tiger Brands
Performance |
| Timeline |
| Sasol Ltd Bee |
| Tiger Brands |
Sasol and Tiger Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Tiger Brands
The main advantage of trading using opposite Sasol and Tiger Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Tiger Brands 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 Tiger Brands will offset losses from the drop in Tiger Brands' long position.The idea behind Sasol Ltd Bee and Tiger Brands 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.| Tiger Brands vs. HomeChoice Investments | Tiger Brands vs. Master Drilling Group | Tiger Brands vs. Reinet Investments SCA | Tiger Brands vs. Zeder Investments |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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