Correlation Between Woodside Energy and Santos
Can any of the company-specific risk be diversified away by investing in both Woodside 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 Woodside Energy and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodside Energy Group and Santos Ltd ADR, you can compare the effects of market volatilities on Woodside 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 Woodside Energy with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodside Energy and Santos.
Diversification Opportunities for Woodside Energy and Santos
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woodside and Santos is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Woodside Energy Group 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 Woodside 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 Woodside Energy Group 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 Woodside Energy i.e., Woodside Energy and Santos go up and down completely randomly.
Pair Corralation between Woodside Energy and Santos
If you would invest 1,576 in Woodside Energy Group on August 30, 2024 and sell it today you would earn a total of 19.00 from holding Woodside Energy Group or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Woodside Energy Group vs. Santos Ltd ADR
Performance |
| Timeline |
| Woodside Energy Group |
| Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Woodside Energy and Santos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodside Energy and Santos
The main advantage of trading using opposite Woodside Energy and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodside 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.| Woodside Energy vs. EOG Resources | Woodside Energy vs. APA Corporation | Woodside Energy vs. Range Resources Corp | Woodside Energy vs. Diamondback Energy |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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