Correlation Between Sasol and Educational Development
Can any of the company-specific risk be diversified away by investing in both Sasol and Educational Development 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 Educational Development into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sasol and Educational Development, you can compare the effects of market volatilities on Sasol and Educational Development 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 Educational Development. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and Educational Development.
Diversification Opportunities for Sasol and Educational Development
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sasol and Educational is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Sasol and Educational Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Educational Development 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 are associated (or correlated) with Educational Development. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Educational Development has no effect on the direction of Sasol i.e., Sasol and Educational Development go up and down completely randomly.
Pair Corralation between Sasol and Educational Development
Considering the 90-day investment horizon Sasol is expected to generate 19.59 times less return on investment than Educational Development. But when comparing it to its historical volatility, Sasol is 1.97 times less risky than Educational Development. It trades about 0.01 of its potential returns per unit of risk. Educational Development is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Educational Development on August 26, 2025 and sell it today you would earn a total of 17.00 from holding Educational Development or generate 15.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sasol vs. Educational Development
Performance |
| Timeline |
| Sasol |
| Educational Development |
Sasol and Educational Development Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sasol and Educational Development
The main advantage of trading using opposite Sasol and Educational Development positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sasol position performs unexpectedly, Educational Development 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 Educational Development will offset losses from the drop in Educational Development's long position.| Sasol vs. Alternative Investment | Sasol vs. Western Asset Investment | Sasol vs. Silk Road Entertainment | Sasol vs. Shenzhen Investment Holdings |
| Educational Development vs. Broadcom | Educational Development vs. Connected Media Tech | Educational Development vs. Nexstar Broadcasting Group | Educational Development vs. Konoike Transport CoLtd |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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