Correlation Between NYSE Composite and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Woodside 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 NYSE Composite and Woodside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Woodside Energy Group, you can compare the effects of market volatilities on NYSE Composite and Woodside 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 NYSE Composite with a short position of Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Woodside Energy.
Diversification Opportunities for NYSE Composite and Woodside Energy
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and Woodside is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Woodside Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Energy Group and NYSE Composite 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 NYSE Composite are associated (or correlated) with Woodside Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Energy Group has no effect on the direction of NYSE Composite i.e., NYSE Composite and Woodside Energy go up and down completely randomly.
Pair Corralation between NYSE Composite and Woodside Energy
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.31 times more return on investment than Woodside Energy. However, NYSE Composite is 3.21 times less risky than Woodside Energy. It trades about 0.17 of its potential returns per unit of risk. Woodside Energy Group is currently generating about -0.06 per unit of risk. If you would invest 1,901,742 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 119,240 from holding NYSE Composite or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Woodside Energy Group
Performance |
| Timeline |
NYSE Composite and Woodside Energy Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Woodside Energy Group
Pair trading matchups for Woodside Energy
Pair Trading with NYSE Composite and Woodside Energy
The main advantage of trading using opposite NYSE Composite and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Woodside 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 Woodside Energy will offset losses from the drop in Woodside Energy's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Woodside Energy vs. EOG Resources | Woodside Energy vs. APA Corporation | Woodside Energy vs. Range Resources Corp | Woodside Energy vs. Diamondback Energy |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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