Correlation Between Canacol Energy and Santos
Can any of the company-specific risk be diversified away by investing in both Canacol Energy 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 Canacol Energy and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canacol Energy and Santos, you can compare the effects of market volatilities on Canacol Energy 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 Canacol Energy with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canacol Energy and Santos.
Diversification Opportunities for Canacol Energy and Santos
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Canacol and Santos is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Canacol Energy and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos and Canacol Energy 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 Canacol Energy 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 Canacol Energy i.e., Canacol Energy and Santos go up and down completely randomly.
Pair Corralation between Canacol Energy and Santos
Assuming the 90 days horizon Canacol Energy is expected to under-perform the Santos. But the otc stock apears to be less risky and, when comparing its historical volatility, Canacol Energy is 1.02 times less risky than Santos. The otc stock trades about -0.03 of its potential returns per unit of risk. The Santos is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 500.00 in Santos on September 3, 2024 and sell it today you would lose (50.00) from holding Santos or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.8% |
| Values | Daily Returns |
Canacol Energy vs. Santos
Performance |
| Timeline |
| Canacol Energy |
| Santos |
Canacol Energy and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canacol Energy and Santos
The main advantage of trading using opposite Canacol Energy and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canacol Energy 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.| Canacol Energy vs. PetroShale | Canacol Energy vs. Inpex Corp ADR | Canacol Energy vs. Battalion Oil Corp | Canacol Energy vs. Condor Petroleum |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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