Correlation Between Woodside Petroleum and New Era
Can any of the company-specific risk be diversified away by investing in both Woodside Petroleum and New Era 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 Petroleum and New Era into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Woodside Petroleum and New Era Energy, you can compare the effects of market volatilities on Woodside Petroleum and New Era 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 Petroleum with a short position of New Era. Check out your portfolio center. Please also check ongoing floating volatility patterns of Woodside Petroleum and New Era.
Diversification Opportunities for Woodside Petroleum and New Era
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Woodside and New is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Woodside Petroleum and New Era Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Era Energy and Woodside 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 Woodside Petroleum are associated (or correlated) with New Era. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Era Energy has no effect on the direction of Woodside Petroleum i.e., Woodside Petroleum and New Era go up and down completely randomly.
Pair Corralation between Woodside Petroleum and New Era
Assuming the 90 days horizon Woodside Petroleum is expected to generate 80.59 times less return on investment than New Era. But when comparing it to its historical volatility, Woodside Petroleum is 6.14 times less risky than New Era. It trades about 0.02 of its potential returns per unit of risk. New Era Energy is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 44.00 in New Era Energy on August 19, 2025 and sell it today you would earn a total of 357.00 from holding New Era Energy or generate 811.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Woodside Petroleum vs. New Era Energy
Performance |
| Timeline |
| Woodside Petroleum |
| New Era Energy |
Woodside Petroleum and New Era Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Woodside Petroleum and New Era
The main advantage of trading using opposite Woodside Petroleum and New Era positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Woodside Petroleum position performs unexpectedly, New Era 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 New Era will offset losses from the drop in New Era's long position.| Woodside Petroleum vs. Galp Energa | Woodside Petroleum vs. PTT PCL ADR | Woodside Petroleum vs. Polski Koncern Naftowy | Woodside Petroleum vs. Inpex Corp ADR |
| New Era vs. Dmc Global | New Era vs. Houston American Energy | New Era vs. AleAnna, Class A | New Era vs. Kolibri Global Energy |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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