Correlation Between Aeris Environmental and Woodside Petroleum

Can any of the company-specific risk be diversified away by investing in both Aeris Environmental and Woodside Petroleum 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 Aeris Environmental and Woodside Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Aeris Environmental and Woodside Petroleum, you can compare the effects of market volatilities on Aeris Environmental and Woodside Petroleum 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 Aeris Environmental with a short position of Woodside Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aeris Environmental and Woodside Petroleum.

Diversification Opportunities for Aeris Environmental and Woodside Petroleum

0.0

Correlation Coefficient

Aeris Environmental  Woodside Petroleum

Pay attention - limited upside

The 3 months correlation between Aeris and Woodside is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aeris Environmental and Woodside Petroleum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woodside Petroleum and Aeris Environmental 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 Aeris Environmental are associated (or correlated) with Woodside Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woodside Petroleum has no effect on the direction of Aeris Environmental i.e., Aeris Environmental and Woodside Petroleum go up and down completely randomly.

Pair Corralation between Aeris Environmental and Woodside Petroleum

If you would invest  6.20  in Aeris Environmental on September 29, 2024 and sell it today you would earn a total of  1.60  from holding Aeris Environmental or generate 25.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aeris Environmental  vs.  Woodside Petroleum

Aeris Environmental

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aeris Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Woodside Petroleum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Woodside Petroleum has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Woodside Petroleum is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Aeris Environmental and Woodside Petroleum

The main advantage of trading using opposite Aeris Environmental and Woodside Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aeris Environmental position performs unexpectedly, Woodside Petroleum 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 Petroleum will offset losses from the drop in Woodside Petroleum's long position.

The idea behind Aeris Environmental and Woodside Petroleum 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.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.