Correlation Between Santos and Battalion Oil
Can any of the company-specific risk be diversified away by investing in both Santos and Battalion Oil 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 Santos and Battalion Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santos Ltd ADR and Battalion Oil Corp, you can compare the effects of market volatilities on Santos and Battalion Oil 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 Santos with a short position of Battalion Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and Battalion Oil.
Diversification Opportunities for Santos and Battalion Oil
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Santos and Battalion is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and Battalion Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Battalion Oil Corp and Santos 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 Santos Ltd ADR are associated (or correlated) with Battalion Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Battalion Oil Corp has no effect on the direction of Santos i.e., Santos and Battalion Oil go up and down completely randomly.
Pair Corralation between Santos and Battalion Oil
If you would invest 580.00 in Battalion Oil Corp on September 3, 2024 and sell it today you would lose (250.00) from holding Battalion Oil Corp or give up 43.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
Santos Ltd ADR vs. Battalion Oil Corp
Performance |
| Timeline |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Battalion Oil Corp |
Santos and Battalion Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santos and Battalion Oil
The main advantage of trading using opposite Santos and Battalion Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, Battalion Oil 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 Battalion Oil will offset losses from the drop in Battalion Oil's long position.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
| Battalion Oil vs. Epsilon Energy | Battalion Oil vs. Citizens Community Bancorp | Battalion Oil vs. Perma Pipe International Holdings | Battalion Oil vs. Amplify Energy Corp |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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