Correlation Between Santos and OMV Aktiengesellscha
Can any of the company-specific risk be diversified away by investing in both Santos and OMV Aktiengesellscha 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 OMV Aktiengesellscha into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Santos Ltd ADR and OMV Aktiengesellschaft, you can compare the effects of market volatilities on Santos and OMV Aktiengesellscha 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 OMV Aktiengesellscha. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and OMV Aktiengesellscha.
Diversification Opportunities for Santos and OMV Aktiengesellscha
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Santos and OMV is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and OMV Aktiengesellschaft in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OMV Aktiengesellschaft 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 Ltd ADR are associated (or correlated) with OMV Aktiengesellscha. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OMV Aktiengesellschaft has no effect on the direction of Santos i.e., Santos and OMV Aktiengesellscha go up and down completely randomly.
Pair Corralation between Santos and OMV Aktiengesellscha
Assuming the 90 days horizon Santos is expected to generate 3.3 times less return on investment than OMV Aktiengesellscha. But when comparing it to its historical volatility, Santos Ltd ADR is 4.91 times less risky than OMV Aktiengesellscha. It trades about 0.06 of its potential returns per unit of risk. OMV Aktiengesellschaft is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 4,108 in OMV Aktiengesellschaft on September 17, 2024 and sell it today you would lose (108.00) from holding OMV Aktiengesellschaft or give up 2.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 42.73% |
Values | Daily Returns |
Santos Ltd ADR vs. OMV Aktiengesellschaft
Performance |
Timeline |
Santos Ltd ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
OMV Aktiengesellschaft |
Santos and OMV Aktiengesellscha Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Santos and OMV Aktiengesellscha
The main advantage of trading using opposite Santos and OMV Aktiengesellscha positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Santos position performs unexpectedly, OMV Aktiengesellscha 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 OMV Aktiengesellscha will offset losses from the drop in OMV Aktiengesellscha's long position.Santos vs. Aker BP ASA | Santos vs. Woodside Energy Group | Santos vs. APA Corporation | Santos vs. EQT Corporation |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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