Correlation Between Stardust Power and Sasol

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

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

Diversification Opportunities for Stardust Power and Sasol

-0.45

Correlation Coefficient

Stardust Power  Sasol

Very good diversification

The 3 months correlation between Stardust and Sasol is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Stardust Power and Sasol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sasol and Stardust Power 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 Stardust Power 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 has no effect on the direction of Stardust Power i.e., Stardust Power and Sasol go up and down completely randomly.

Pair Corralation between Stardust Power and Sasol

Given the investment horizon of 90 days Stardust Power is expected to generate 4.43 times more return on investment than Sasol. However, Stardust Power is 4.43 times more volatile than Sasol. It trades about 0.07 of its potential returns per unit of risk. Sasol is currently generating about 0.21 per unit of risk. If you would invest  50.00  in Stardust Power on April 25, 2025 and sell it today you would lose (1.00) from holding Stardust Power or give up 2.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Stardust Power  vs.  Sasol

Stardust Power

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stardust Power are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Stardust Power unveiled solid returns over the last few months and may actually be approaching a breakup point.

Sasol

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sasol are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, Sasol disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stardust Power and Sasol

The main advantage of trading using opposite Stardust Power and Sasol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stardust Power 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 Stardust Power and Sasol 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 Correlations module to find global opportunities by holding instruments from different markets.