Correlation Between Woodside Energy and WOODSIDE ENE
Can any of the company-specific risk be diversified away by investing in both Woodside Energy and WOODSIDE ENE 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 WOODSIDE ENE 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 WOODSIDE ENE SPADR, you can compare the effects of market volatilities on Woodside Energy and WOODSIDE ENE 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 WOODSIDE ENE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodside Energy and WOODSIDE ENE.
Diversification Opportunities for Woodside Energy and WOODSIDE ENE
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Woodside and WOODSIDE is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Woodside Energy Group and WOODSIDE ENE SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WOODSIDE ENE SPADR 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 WOODSIDE ENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WOODSIDE ENE SPADR has no effect on the direction of Woodside Energy i.e., Woodside Energy and WOODSIDE ENE go up and down completely randomly.
Pair Corralation between Woodside Energy and WOODSIDE ENE
Assuming the 90 days trading horizon Woodside Energy Group is expected to under-perform the WOODSIDE ENE. In addition to that, Woodside Energy is 1.0 times more volatile than WOODSIDE ENE SPADR. It trades about -0.12 of its total potential returns per unit of risk. WOODSIDE ENE SPADR is currently generating about -0.07 per unit of volatility. If you would invest 1,670 in WOODSIDE ENE SPADR on March 9, 2024 and sell it today you would lose (30.00) from holding WOODSIDE ENE SPADR or give up 1.8% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Woodside Energy Group vs. WOODSIDE ENE SPADR
Performance |
Timeline |
Woodside Energy Group |
WOODSIDE ENE SPADR |
Woodside Energy and WOODSIDE ENE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Woodside Energy and WOODSIDE ENE
The main advantage of trading using opposite Woodside Energy and WOODSIDE ENE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodside Energy position performs unexpectedly, WOODSIDE ENE 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 WOODSIDE ENE will offset losses from the drop in WOODSIDE ENE's long position.Woodside Energy vs. EOG Resources | Woodside Energy vs. Hyster Yale Materials Handling | Woodside Energy vs. IMPERIAL TOBACCO | Woodside Energy vs. Rayonier Advanced Materials |
WOODSIDE ENE vs. EOG Resources | WOODSIDE ENE vs. Hyster Yale Materials Handling | WOODSIDE ENE vs. IMPERIAL TOBACCO | WOODSIDE ENE vs. Rayonier Advanced Materials |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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