Correlation Between WOODSIDE ENE and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both WOODSIDE ENE and CHINA HUARONG 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 CHINA HUARONG 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 CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on WOODSIDE ENE and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of WOODSIDE ENE and CHINA HUARONG.
Diversification Opportunities for WOODSIDE ENE and CHINA HUARONG
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WOODSIDE and CHINA is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding WOODSIDE ENE SPADR and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of WOODSIDE ENE i.e., WOODSIDE ENE and CHINA HUARONG go up and down completely randomly.
Pair Corralation between WOODSIDE ENE and CHINA HUARONG
If you would invest 0.10 in CHINA HUARONG ENERHD 50 on November 28, 2024 and sell it today you would earn a total of 0.00 from holding CHINA HUARONG ENERHD 50 or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WOODSIDE ENE SPADR vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| WOODSIDE ENE SPADR |
| CHINA HUARONG ENERHD |
WOODSIDE ENE and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WOODSIDE ENE and CHINA HUARONG
The main advantage of trading using opposite WOODSIDE ENE and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WOODSIDE ENE position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| WOODSIDE ENE vs. COMBA TELECOM SYST | WOODSIDE ENE vs. Comba Telecom Systems | WOODSIDE ENE vs. American Eagle Outfitters | WOODSIDE ENE vs. FAST RETAIL ADR |
| CHINA HUARONG vs. PKSHA TECHNOLOGY INC | CHINA HUARONG vs. Investment AB Latour | CHINA HUARONG vs. REINET INVESTMENTS SCA | CHINA HUARONG vs. Allegheny Technologies Incorporated |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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