Correlation Between Santos and Journey Energy
Can any of the company-specific risk be diversified away by investing in both Santos and Journey Energy 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 Journey Energy 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 Journey Energy, you can compare the effects of market volatilities on Santos and Journey Energy 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 Journey Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and Journey Energy.
Diversification Opportunities for Santos and Journey Energy
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Santos and Journey is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and Journey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Journey Energy 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 Journey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Journey Energy has no effect on the direction of Santos i.e., Santos and Journey Energy go up and down completely randomly.
Pair Corralation between Santos and Journey Energy
If you would invest 538.00 in Santos Ltd ADR on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Santos Ltd ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Santos Ltd ADR vs. Journey Energy
Performance |
| Timeline |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Journey Energy |
Santos and Journey Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santos and Journey Energy
The main advantage of trading using opposite Santos and Journey Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, Journey Energy 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 Journey Energy will offset losses from the drop in Journey Energy's long position.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
| Journey Energy vs. Petroleo Brasileiro Petrobras | Journey Energy vs. Equinor ASA ADR | Journey Energy vs. Eni SpA ADR | Journey Energy vs. YPF Sociedad Anonima |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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