Correlation Between Santos and United Energy
Can any of the company-specific risk be diversified away by investing in both Santos and United 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 United 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 United Energy Corp, you can compare the effects of market volatilities on Santos and United 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 United Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and United Energy.
Diversification Opportunities for Santos and United Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Santos and United is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and United Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Energy 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 United Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Energy Corp has no effect on the direction of Santos i.e., Santos and United Energy go up and down completely randomly.
Pair Corralation between Santos and United Energy
If you would invest (100.00) in Santos Ltd ADR on January 11, 2025 and sell it today you would earn a total of 100.00 from holding Santos Ltd ADR or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Santos Ltd ADR vs. United Energy Corp
Performance |
| Timeline |
| Santos Ltd ADR |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
| United Energy Corp |
Santos and United Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santos and United Energy
The main advantage of trading using opposite Santos and United Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, United 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 United Energy will offset losses from the drop in United Energy's long position.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
| United Energy vs. Calima Energy Limited | United Energy vs. Barrister Energy LLC | United Energy vs. Buru Energy Limited | United Energy vs. Altura 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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