Correlation Between United Energy and Santos
Can any of the company-specific risk be diversified away by investing in both United Energy 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 United Energy and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Energy Corp and Santos Ltd ADR, you can compare the effects of market volatilities on United Energy 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 United Energy with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Energy and Santos.
Diversification Opportunities for United Energy and Santos
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between United and Santos is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding United Energy Corp 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 United Energy 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 United Energy Corp 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 United Energy i.e., United Energy and Santos go up and down completely randomly.
Pair Corralation between United Energy and Santos
If you would invest 5.00 in United Energy Corp on September 3, 2024 and sell it today you would lose (0.50) from holding United Energy Corp or give up 10.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.8% |
| Values | Daily Returns |
United Energy Corp vs. Santos Ltd ADR
Performance |
| Timeline |
| United Energy Corp |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
United Energy and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Energy and Santos
The main advantage of trading using opposite United Energy and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Energy 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.| United Energy vs. Advantage Solutions | United Energy vs. Atlas Corp | United Energy vs. PureCycle Technologies | United Energy vs. WM Technology |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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