Correlation Between Woodside Petroleum and Petrichor Energy

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

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

Diversification Opportunities for Woodside Petroleum and Petrichor Energy

0.0

Correlation Coefficient

Woodside Petroleum  Petrichor Energy

Pay attention - limited upside

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

Pair Corralation between Woodside Petroleum and Petrichor Energy

If you would invest  1,310  in Woodside Petroleum on May 6, 2025 and sell it today you would earn a total of  399.00  from holding Woodside Petroleum or generate 30.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Woodside Petroleum  vs.  Petrichor Energy

Woodside Petroleum

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Woodside Petroleum are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Woodside Petroleum reported solid returns over the last few months and may actually be approaching a breakup point.

Petrichor Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Petrichor Energy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Petrichor Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Woodside Petroleum and Petrichor Energy

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

The idea behind Woodside Petroleum and Petrichor Energy 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.