Correlation Between Sasol and Cs Bci

Can any of the company-specific risk be diversified away by investing in both Sasol and Cs Bci 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 Sasol and Cs Bci into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sasol Ltd Bee and Cs Bci Prudential, you can compare the effects of market volatilities on Sasol and Cs Bci 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 Cs Bci. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Cs Bci.

Diversification Opportunities for Sasol and Cs Bci

-0.6

Correlation Coefficient

Sasol  Cs Bci

Excellent diversification

The 3 months correlation between Sasol and 0P0000IR5N is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Ltd Bee and Cs Bci Prudential in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cs Bci Prudential 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 Cs Bci. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cs Bci Prudential has no effect on the direction of Sasol i.e., Sasol and Cs Bci go up and down completely randomly.

Pair Corralation between Sasol and Cs Bci

Assuming the 90 days trading horizon Sasol Ltd Bee is expected to under-perform the Cs Bci. In addition to that, Sasol is 5.63 times more volatile than Cs Bci Prudential. It trades about -0.18 of its total potential returns per unit of risk. Cs Bci Prudential is currently generating about 0.22 per unit of volatility. If you would invest  244.00  in Cs Bci Prudential on September 5, 2024 and sell it today you would earn a total of  11.00  from holding Cs Bci Prudential or generate 4.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Sasol Ltd Bee  vs.  Cs Bci Prudential

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.

Cs Bci Prudential

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Cs Bci Prudential are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong basic indicators, Cs Bci is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Sasol and Cs Bci

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

The idea behind Sasol Ltd Bee and Cs Bci Prudential 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.