Correlation Between Empire Petroleum and Woodside Energy
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum 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 Empire Petroleum and Woodside Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Empire Petroleum Corp and Woodside Energy Group, you can compare the effects of market volatilities on Empire Petroleum 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 Empire Petroleum with a short position of Woodside Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and Woodside Energy.
Diversification Opportunities for Empire Petroleum and Woodside Energy
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Empire and Woodside is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp 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 Empire Petroleum 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 Empire Petroleum Corp 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 Empire Petroleum i.e., Empire Petroleum and Woodside Energy go up and down completely randomly.
Pair Corralation between Empire Petroleum and Woodside Energy
Allowing for the 90-day total investment horizon Empire Petroleum Corp is expected to generate 2.69 times more return on investment than Woodside Energy. However, Empire Petroleum is 2.69 times more volatile than Woodside Energy Group. It trades about 0.16 of its potential returns per unit of risk. Woodside Energy Group is currently generating about -0.2 per unit of risk. If you would invest 575.00 in Empire Petroleum Corp on September 24, 2024 and sell it today you would earn a total of 96.00 from holding Empire Petroleum Corp or generate 16.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Empire Petroleum Corp vs. Woodside Energy Group
Performance |
Timeline |
Empire Petroleum Corp |
Woodside Energy Group |
Empire Petroleum and Woodside Energy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Empire Petroleum and Woodside Energy
The main advantage of trading using opposite Empire Petroleum and Woodside Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum 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.Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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