Correlation Between WOODSIDE ENE and EOG Resources
Can any of the company-specific risk be diversified away by investing in both WOODSIDE ENE and EOG Resources 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 ENE and EOG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WOODSIDE ENE SPADR and EOG Resources, you can compare the effects of market volatilities on WOODSIDE ENE and EOG Resources 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 ENE with a short position of EOG Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOODSIDE ENE and EOG Resources.
Diversification Opportunities for WOODSIDE ENE and EOG Resources
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between WOODSIDE and EOG is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding WOODSIDE ENE SPADR and EOG Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EOG Resources and WOODSIDE ENE 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 ENE SPADR are associated (or correlated) with EOG Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EOG Resources has no effect on the direction of WOODSIDE ENE i.e., WOODSIDE ENE and EOG Resources go up and down completely randomly.
Pair Corralation between WOODSIDE ENE and EOG Resources
Assuming the 90 days horizon WOODSIDE ENE SPADR is expected to under-perform the EOG Resources. In addition to that, WOODSIDE ENE is 1.82 times more volatile than EOG Resources. It trades about -0.01 of its total potential returns per unit of risk. EOG Resources is currently generating about 0.07 per unit of volatility. If you would invest 11,068 in EOG Resources on November 2, 2024 and sell it today you would earn a total of 1,290 from holding EOG Resources or generate 11.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
WOODSIDE ENE SPADR vs. EOG Resources
Performance |
| Timeline |
| WOODSIDE ENE SPADR |
| EOG Resources |
WOODSIDE ENE and EOG Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOODSIDE ENE and EOG Resources
The main advantage of trading using opposite WOODSIDE ENE and EOG Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOODSIDE ENE position performs unexpectedly, EOG Resources 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 EOG Resources will offset losses from the drop in EOG Resources' long position.| WOODSIDE ENE vs. Alibaba Group Holding | WOODSIDE ENE vs. ConocoPhillips | WOODSIDE ENE vs. CNOOC | WOODSIDE ENE vs. EOG Resources |
| EOG Resources vs. Alibaba Group Holding | EOG Resources vs. ConocoPhillips | EOG Resources vs. CNOOC | EOG Resources vs. Canadian Natural Resources |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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