Correlation Between Woodside Energy and Alibaba Group
Can any of the company-specific risk be diversified away by investing in both Woodside Energy and Alibaba Group 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 Alibaba Group 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 Alibaba Group Holding, you can compare the effects of market volatilities on Woodside Energy and Alibaba Group 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 Alibaba Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodside Energy and Alibaba Group.
Diversification Opportunities for Woodside Energy and Alibaba Group
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Woodside and Alibaba is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Woodside Energy Group and Alibaba Group Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alibaba Group Holding 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 Alibaba Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alibaba Group Holding has no effect on the direction of Woodside Energy i.e., Woodside Energy and Alibaba Group go up and down completely randomly.
Pair Corralation between Woodside Energy and Alibaba Group
Assuming the 90 days trading horizon Woodside Energy Group is expected to under-perform the Alibaba Group. But the stock apears to be less risky and, when comparing its historical volatility, Woodside Energy Group is 2.55 times less risky than Alibaba Group. The stock trades about -0.17 of its potential returns per unit of risk. The Alibaba Group Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 827.00 in Alibaba Group Holding on February 27, 2024 and sell it today you would earn a total of 123.00 from holding Alibaba Group Holding or generate 14.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Woodside Energy Group vs. Alibaba Group Holding
Performance |
Timeline |
Woodside Energy Group |
Alibaba Group Holding |
Woodside Energy and Alibaba Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woodside Energy and Alibaba Group
The main advantage of trading using opposite Woodside Energy and Alibaba Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodside Energy position performs unexpectedly, Alibaba Group 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 Alibaba Group will offset losses from the drop in Alibaba Group's long position.Woodside Energy vs. CITIUS RESOURCES LS 005 | Woodside Energy vs. Superior Plus Corp | Woodside Energy vs. Origin Agritech | Woodside Energy vs. SIVERS SEMICONDUCTORS AB |
Alibaba Group vs. Apple Inc | Alibaba Group vs. Apple Inc | Alibaba Group vs. Apple Inc | Alibaba Group vs. Apple Inc |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas |