Correlation Between ATT and Santos
Can any of the company-specific risk be diversified away by investing in both ATT and Santos 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 ATT and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATT Inc and Santos Ltd ADR, you can compare the effects of market volatilities on ATT and Santos 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 ATT with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATT and Santos.
Diversification Opportunities for ATT and Santos
Pay attention - limited upside
The 3 months correlation between ATT and Santos is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ATT Inc and Santos Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos Ltd ADR and ATT 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 ATT Inc are associated (or correlated) with Santos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santos Ltd ADR has no effect on the direction of ATT i.e., ATT and Santos go up and down completely randomly.
Pair Corralation between ATT and Santos
If you would invest 1,730 in ATT Inc on November 28, 2024 and sell it today you would earn a total of 935.00 from holding ATT Inc or generate 54.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
ATT Inc vs. Santos Ltd ADR
Performance |
| Timeline |
| ATT Inc |
| Santos Ltd ADR |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
ATT and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATT and Santos
The main advantage of trading using opposite ATT and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATT position performs unexpectedly, Santos 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 Santos will offset losses from the drop in Santos' long position.The idea behind ATT Inc and Santos Ltd ADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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