Correlation Between Jubilee Platinum and Sasol

Can any of the company-specific risk be diversified away by investing in both Jubilee Platinum and Sasol at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jubilee Platinum and Sasol into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jubilee Platinum and Sasol Ltd Bee, you can compare the effects of market volatilities on Jubilee Platinum and Sasol 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 Jubilee Platinum with a short position of Sasol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jubilee Platinum and Sasol.

Diversification Opportunities for Jubilee Platinum and Sasol

-0.09

Correlation Coefficient

Jubilee Platinum  Sasol

Good diversification

The 3 months correlation between Jubilee and Sasol is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Jubilee Platinum and Sasol Ltd Bee in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol Ltd Bee and Jubilee Platinum 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 Jubilee Platinum are associated (or correlated) with Sasol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sasol Ltd Bee has no effect on the direction of Jubilee Platinum i.e., Jubilee Platinum and Sasol go up and down completely randomly.

Pair Corralation between Jubilee Platinum and Sasol

Assuming the 90 days trading horizon Jubilee Platinum is expected to generate 1.42 times more return on investment than Sasol. However, Jubilee Platinum is 1.42 times more volatile than Sasol Ltd Bee. It trades about -0.07 of its potential returns per unit of risk. Sasol Ltd Bee is currently generating about -0.18 per unit of risk. If you would invest  12,000  in Jubilee Platinum on September 16, 2024 and sell it today you would lose (1,500) from holding Jubilee Platinum or give up 12.5% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Jubilee Platinum  vs.  Sasol Ltd Bee

Jubilee Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jubilee Platinum has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Sasol Ltd Bee

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sasol Ltd Bee has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Etf's fundamental drivers remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the ETF investors.

Pair Trading with Jubilee Platinum and Sasol

The main advantage of trading using opposite Jubilee Platinum and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jubilee Platinum position performs unexpectedly, Sasol 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 Sasol will offset losses from the drop in Sasol's long position.

The idea behind Jubilee Platinum and Sasol Ltd Bee 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.

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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.