Correlation Between Santos and Western Capital
Can any of the company-specific risk be diversified away by investing in both Santos and Western Capital 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 Western Capital 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 Western Capital Resources, you can compare the effects of market volatilities on Santos and Western Capital 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 Western Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and Western Capital.
Diversification Opportunities for Santos and Western Capital
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Santos and Western is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and Western Capital Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Capital Resources 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 Western Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Capital Resources has no effect on the direction of Santos i.e., Santos and Western Capital go up and down completely randomly.
Pair Corralation between Santos and Western Capital
If you would invest 460.00 in Western Capital Resources on September 1, 2024 and sell it today you would earn a total of 468.00 from holding Western Capital Resources or generate 101.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
Santos Ltd ADR vs. Western Capital Resources
Performance |
| Timeline |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Western Capital Resources |
Santos and Western Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Santos and Western Capital
The main advantage of trading using opposite Santos and Western Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, Western Capital 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 Western Capital will offset losses from the drop in Western Capital's long position.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
| Western Capital vs. Porsche Automobile Holding | Western Capital vs. Ferrari NV | Western Capital vs. Toyota Motor | Western Capital vs. General Motors |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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