Correlation Between Valeura Energy and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both Valeura Energy 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 Valeura Energy and Woodside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Valeura Energy and Woodside Energy Group, you can compare the effects of market volatilities on Valeura Energy 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 Valeura Energy with a short position of Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Valeura Energy and Woodside Energy.
Diversification Opportunities for Valeura Energy and Woodside Energy
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Valeura and Woodside is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Valeura Energy 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 Valeura 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 Valeura Energy 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 Valeura Energy i.e., Valeura Energy and Woodside Energy go up and down completely randomly.
Pair Corralation between Valeura Energy and Woodside Energy
Assuming the 90 days horizon Valeura Energy is expected to generate 2.01 times more return on investment than Woodside Energy. However, Valeura Energy is 2.01 times more volatile than Woodside Energy Group. It trades about 0.06 of its potential returns per unit of risk. Woodside Energy Group is currently generating about -0.04 per unit of risk. If you would invest 397.00 in Valeura Energy on November 28, 2024 and sell it today you would earn a total of 131.00 from holding Valeura Energy or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Valeura Energy vs. Woodside Energy Group
Performance |
| Timeline |
| Valeura Energy |
| Woodside Energy Group |
Valeura Energy and Woodside Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Valeura Energy and Woodside Energy
The main advantage of trading using opposite Valeura Energy and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Valeura Energy 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.| Valeura Energy vs. Xponential Fitness | Valeura Energy vs. CaliberCos Class A | Valeura Energy vs. Analog Devices | Valeura Energy vs. Waste Management |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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