Correlation Between SUN ART and Net 1

Can any of the company-specific risk be diversified away by investing in both SUN ART and Net 1 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 SUN ART and Net 1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SUN ART RETAIL and Net 1 Ueps, you can compare the effects of market volatilities on SUN ART and Net 1 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 SUN ART with a short position of Net 1. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN ART and Net 1.

Diversification Opportunities for SUN ART and Net 1

-0.64

Correlation Coefficient

SUN ART  Net 1

Excellent diversification

The 3 months correlation between SUN and Net is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding SUN ART RETAIL and Net 1 Ueps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Net 1 Ueps and SUN ART 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 SUN ART RETAIL are associated (or correlated) with Net 1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Net 1 Ueps has no effect on the direction of SUN ART i.e., SUN ART and Net 1 go up and down completely randomly.

Pair Corralation between SUN ART and Net 1

Assuming the 90 days trading horizon SUN ART RETAIL is expected to generate 1.08 times more return on investment than Net 1. However, SUN ART is 1.08 times more volatile than Net 1 Ueps. It trades about 0.04 of its potential returns per unit of risk. Net 1 Ueps is currently generating about -0.06 per unit of risk. If you would invest  23.00  in SUN ART RETAIL on April 3, 2025 and sell it today you would earn a total of  1.00  from holding SUN ART RETAIL or generate 4.35% return on investment over 90 days.

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

SUN ART RETAIL  vs.  Net 1 Ueps

SUN ART RETAIL

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SUN ART RETAIL are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile forward indicators, SUN ART may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Net 1 Ueps

Risk-Adjusted Performance

Very Weak

Over the last 90 days Net 1 Ueps has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with SUN ART and Net 1

The main advantage of trading using opposite SUN ART and Net 1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN ART position performs unexpectedly, Net 1 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 Net 1 will offset losses from the drop in Net 1's long position.

The idea behind SUN ART RETAIL and Net 1 Ueps 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.