Correlation Between Battalion Oil and Santos
Can any of the company-specific risk be diversified away by investing in both Battalion Oil 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 Battalion Oil and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Battalion Oil Corp and Santos, you can compare the effects of market volatilities on Battalion Oil 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 Battalion Oil with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Battalion Oil and Santos.
Diversification Opportunities for Battalion Oil and Santos
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Battalion and Santos is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Battalion Oil Corp and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos and Battalion Oil 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 Battalion Oil Corp 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 has no effect on the direction of Battalion Oil i.e., Battalion Oil and Santos go up and down completely randomly.
Pair Corralation between Battalion Oil and Santos
Given the investment horizon of 90 days Battalion Oil is expected to generate 6.07 times less return on investment than Santos. In addition to that, Battalion Oil is 2.1 times more volatile than Santos. It trades about 0.0 of its total potential returns per unit of risk. Santos is currently generating about 0.01 per unit of volatility. If you would invest 490.00 in Santos on September 3, 2024 and sell it today you would lose (40.00) from holding Santos or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 87.79% |
| Values | Daily Returns |
Battalion Oil Corp vs. Santos
Performance |
| Timeline |
| Battalion Oil Corp |
| Santos |
Battalion Oil and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Battalion Oil and Santos
The main advantage of trading using opposite Battalion Oil and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Battalion Oil 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.| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
| Santos vs. CNX Resources Corp | Santos vs. MV Oil Trust | Santos vs. San Juan Basin | Santos vs. VOC Energy Trust |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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