Correlation Between Santos and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Santos and Dow Jones 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 Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santos and Dow Jones Industrial, you can compare the effects of market volatilities on Santos and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and Dow Jones.
Diversification Opportunities for Santos and Dow Jones
Excellent diversification
The 3 months correlation between Santos and Dow is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Santos and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Santos i.e., Santos and Dow Jones go up and down completely randomly.
Pair Corralation between Santos and Dow Jones
Assuming the 90 days horizon Santos is expected to generate 2.97 times less return on investment than Dow Jones. In addition to that, Santos is 3.31 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.37 per unit of volatility. If you would invest 4,176,346 in Dow Jones Industrial on September 1, 2024 and sell it today you would earn a total of 314,719 from holding Dow Jones Industrial or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Santos vs. Dow Jones Industrial
Performance |
| Timeline |
Santos and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Santos
Pair trading matchups for Santos
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Santos and Dow Jones
The main advantage of trading using opposite Santos and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Santos vs. Permian Resources | Santos vs. Devon Energy | Santos vs. EOG Resources | Santos vs. Coterra Energy |
| Dow Jones vs. Catalyst Pharmaceuticals | Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. National CineMedia | Dow Jones vs. Mink Therapeutics |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |