Correlation Between Coterra Energy and Santos
Can any of the company-specific risk be diversified away by investing in both Coterra 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 Coterra Energy and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coterra Energy and Santos, you can compare the effects of market volatilities on Coterra 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 Coterra Energy with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coterra Energy and Santos.
Diversification Opportunities for Coterra Energy and Santos
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Coterra and Santos is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Coterra Energy and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos and Coterra 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 Coterra 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 Coterra Energy i.e., Coterra Energy and Santos go up and down completely randomly.
Pair Corralation between Coterra Energy and Santos
Given the investment horizon of 90 days Coterra Energy is expected to generate 0.48 times more return on investment than Santos. However, Coterra Energy is 2.08 times less risky than Santos. It trades about 0.0 of its potential returns per unit of risk. Santos is currently generating about -0.01 per unit of risk. If you would invest 2,726 in Coterra Energy on September 1, 2024 and sell it today you would lose (54.00) from holding Coterra Energy or give up 1.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Coterra Energy vs. Santos
Performance |
| Timeline |
| Coterra Energy |
| Santos |
Coterra Energy and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coterra Energy and Santos
The main advantage of trading using opposite Coterra Energy and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coterra 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.| Coterra Energy vs. Devon Energy | Coterra Energy vs. Diamondback Energy | Coterra Energy vs. EOG Resources | Coterra Energy vs. ConocoPhillips |
| Santos vs. Permian Resources | Santos vs. Devon Energy | Santos vs. EOG Resources | Santos vs. Coterra Energy |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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