Correlation Between Sasol and AIB Group

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

By analyzing existing cross correlation between Sasol Limited and AIB Group PLC, you can compare the effects of market volatilities on Sasol and AIB Group 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 AIB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sasol and AIB Group.

Diversification Opportunities for Sasol and AIB Group

0.0

Correlation Coefficient

Sasol  AIB Group

Pay attention - limited upside

The 3 months correlation between Sasol and AIB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sasol Limited and AIB Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIB Group PLC 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 Limited are associated (or correlated) with AIB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIB Group PLC has no effect on the direction of Sasol i.e., Sasol and AIB Group go up and down completely randomly.

Pair Corralation between Sasol and AIB Group

If you would invest  348.00  in Sasol Limited on May 13, 2025 and sell it today you would earn a total of  146.00  from holding Sasol Limited or generate 41.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sasol Limited  vs.  AIB Group PLC

Sasol Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sasol Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting basic indicators, Sasol reported solid returns over the last few months and may actually be approaching a breakup point.

AIB Group PLC

Risk-Adjusted Performance

Weakest

Over the last 90 days AIB Group PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AIB Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Sasol and AIB Group

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

The idea behind Sasol Limited and AIB Group PLC 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.