Correlation Between EQT and Santos
Can any of the company-specific risk be diversified away by investing in both EQT 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 EQT and Santos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQT Corporation and Santos, you can compare the effects of market volatilities on EQT 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 EQT with a short position of Santos. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQT and Santos.
Diversification Opportunities for EQT and Santos
Pay attention - limited upside
The 3 months correlation between EQT and Santos is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding EQT Corp. and Santos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santos and EQT 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 EQT Corporation 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 has no effect on the direction of EQT i.e., EQT and Santos go up and down completely randomly.
Pair Corralation between EQT and Santos
Considering the 90-day investment horizon EQT Corporation is expected to generate 0.66 times more return on investment than Santos. However, EQT Corporation is 1.53 times less risky than Santos. It trades about 0.23 of its potential returns per unit of risk. Santos is currently generating about -0.04 per unit of risk. If you would invest 3,313 in EQT Corporation on September 17, 2024 and sell it today you would earn a total of 1,246 from holding EQT Corporation or generate 37.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EQT Corp. vs. Santos
Performance |
Timeline |
EQT Corporation |
Santos |
EQT and Santos Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EQT and Santos
The main advantage of trading using opposite EQT and Santos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQT 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.EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback Energy |
Santos vs. Permian Resources | Santos vs. Devon Energy | Santos vs. EOG Resources | Santos vs. Coterra Energy |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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