Correlation Between Santos and Cardinal Energy

Can any of the company-specific risk be diversified away by investing in both Santos and Cardinal Energy 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 Cardinal Energy 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 Cardinal Energy, you can compare the effects of market volatilities on Santos and Cardinal Energy 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 Cardinal Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Santos and Cardinal Energy.

Diversification Opportunities for Santos and Cardinal Energy

-0.73

Correlation Coefficient

Santos  Cardinal Energy

Pay attention - limited upside

The 3 months correlation between Santos and Cardinal is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Santos Ltd ADR and Cardinal Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Energy 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 Cardinal Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Energy has no effect on the direction of Santos i.e., Santos and Cardinal Energy go up and down completely randomly.

Pair Corralation between Santos and Cardinal Energy

Assuming the 90 days horizon Santos Ltd ADR is expected to under-perform the Cardinal Energy. In addition to that, Santos is 1.25 times more volatile than Cardinal Energy. It trades about -0.12 of its total potential returns per unit of risk. Cardinal Energy is currently generating about 0.11 per unit of volatility. If you would invest  499.00  in Cardinal Energy on July 17, 2025 and sell it today you would earn a total of  50.00  from holding Cardinal Energy or generate 10.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Santos Ltd ADR  vs.  Cardinal Energy

Santos Ltd ADR

Risk-Adjusted Performance

Weakest

Over the last 90 days Santos Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in November 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Cardinal Energy

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Cardinal Energy are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Cardinal Energy may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Santos and Cardinal Energy

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

The idea behind Santos Ltd ADR and Cardinal Energy 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.