Correlation Between Western Capital and Santeon

Can any of the company-specific risk be diversified away by investing in both Western Capital and Santeon 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 Western Capital and Santeon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Western Capital Resources and Santeon Group, you can compare the effects of market volatilities on Western Capital and Santeon 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 Western Capital with a short position of Santeon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Capital and Santeon.

Diversification Opportunities for Western Capital and Santeon

0.0

Correlation Coefficient

Western Capital  Santeon

Pay attention - limited upside

The 3 months correlation between Western and Santeon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Capital Resources and Santeon Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santeon Group and Western Capital 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 Western Capital Resources are associated (or correlated) with Santeon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santeon Group has no effect on the direction of Western Capital i.e., Western Capital and Santeon go up and down completely randomly.

Pair Corralation between Western Capital and Santeon

Given the investment horizon of 90 days Western Capital is expected to generate 2.19 times less return on investment than Santeon. But when comparing it to its historical volatility, Western Capital Resources is 3.8 times less risky than Santeon. It trades about 0.09 of its potential returns per unit of risk. Santeon Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Santeon Group on September 15, 2024 and sell it today you would earn a total of  0.00  from holding Santeon Group or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Western Capital Resources  vs.  Santeon Group

Western Capital Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Western Capital Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Western Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Santeon Group

Risk-Adjusted Performance

3 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Santeon Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, Santeon unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Western Capital and Santeon

The main advantage of trading using opposite Western Capital and Santeon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Capital position performs unexpectedly, Santeon 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 Santeon will offset losses from the drop in Santeon's long position.

The idea behind Western Capital Resources and Santeon Group 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.