Correlation Between Aker BP and Santos
Can any of the company-specific risk be diversified away by investing in both Aker BP and Santos 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 Aker BP and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aker BP ASA and Santos Ltd ADR, you can compare the effects of market volatilities on Aker BP and Santos 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 Aker BP with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aker BP and Santos.
Diversification Opportunities for Aker BP and Santos
Good diversification
The 3 months correlation between Aker and Santos is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Aker BP ASA and Santos Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos Ltd ADR and Aker BP 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 Aker BP ASA are associated (or correlated) with Santos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos Ltd ADR has no effect on the direction of Aker BP i.e., Aker BP and Santos go up and down completely randomly.
Pair Corralation between Aker BP and Santos
If you would invest 1,109 in Aker BP ASA on September 1, 2024 and sell it today you would lose (89.00) from holding Aker BP ASA or give up 8.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.79% |
| Values | Daily Returns |
Aker BP ASA vs. Santos Ltd ADR
Performance |
| Timeline |
| Aker BP ASA |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Aker BP and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aker BP and Santos
The main advantage of trading using opposite Aker BP and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aker BP position performs unexpectedly, Santos 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 Santos will offset losses from the drop in Santos' long position.The idea behind Aker BP ASA and Santos Ltd ADR 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.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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