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

0.98

Correlation Coefficient

Woodside Energy  WOODSIDE ENE

Almost no diversification

The 3 months correlation between Woodside and WOODSIDE is 0.98. 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 is expected to generate 1.15 times less return on investment than WOODSIDE ENE. But when comparing it to its historical volatility, Woodside Energy Group is 1.48 times less risky than WOODSIDE ENE. It trades about 0.2 of its potential returns per unit of risk. WOODSIDE ENE SPADR is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,070  in WOODSIDE ENE SPADR on April 22, 2025 and sell it today you would earn a total of  280.00  from holding WOODSIDE ENE SPADR or generate 26.17% return on investment 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

Woodside Energy Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Woodside Energy Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Woodside Energy reported solid returns over the last few months and may actually be approaching a breakup point.

WOODSIDE ENE SPADR

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in WOODSIDE ENE SPADR are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, WOODSIDE ENE reported solid returns over the last few months and may actually be approaching a breakup point.

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.

The idea behind Woodside Energy Group and WOODSIDE ENE SPADR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.