Correlation Between Bank Central and Santos
Can any of the company-specific risk be diversified away by investing in both Bank Central 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 Bank Central and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Santos Ltd ADR, you can compare the effects of market volatilities on Bank Central 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 Bank Central with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Santos.
Diversification Opportunities for Bank Central and Santos
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bank and Santos is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia 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 Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and Santos go up and down completely randomly.
Pair Corralation between Bank Central and Santos
Assuming the 90 days horizon Bank Central is expected to generate 2.43 times less return on investment than Santos. But when comparing it to its historical volatility, Bank Central Asia is 1.33 times less risky than Santos. It trades about 0.03 of its potential returns per unit of risk. Santos Ltd ADR is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 467.00 in Santos Ltd ADR on September 3, 2024 and sell it today you would earn a total of 71.00 from holding Santos Ltd ADR or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Bank Central Asia vs. Santos Ltd ADR
Performance |
| Timeline |
| Bank Central Asia |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bank Central and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and Santos
The main advantage of trading using opposite Bank Central and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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.| Bank Central vs. Nedbank Group | Bank Central vs. Standard Bank Group | Bank Central vs. Kasikornbank Public Co | Bank Central vs. KBC Groep NV |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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