Correlation Between Balchem and EXXON
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By analyzing existing cross correlation between Balchem and EXXON MOBIL P, you can compare the effects of market volatilities on Balchem and EXXON 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 Balchem with a short position of EXXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balchem and EXXON.
Diversification Opportunities for Balchem and EXXON
Good diversification
The 3 months correlation between Balchem and EXXON is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Balchem and EXXON MOBIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL P and Balchem 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 Balchem are associated (or correlated) with EXXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXXON MOBIL P has no effect on the direction of Balchem i.e., Balchem and EXXON go up and down completely randomly.
Pair Corralation between Balchem and EXXON
Given the investment horizon of 90 days Balchem is expected to generate 1.47 times more return on investment than EXXON. However, Balchem is 1.47 times more volatile than EXXON MOBIL P. It trades about 0.12 of its potential returns per unit of risk. EXXON MOBIL P is currently generating about 0.05 per unit of risk. If you would invest 11,465 in Balchem on August 25, 2024 and sell it today you would earn a total of 6,779 from holding Balchem or generate 59.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.42% |
| Values | Daily Returns |
Balchem vs. EXXON MOBIL P
Performance |
| Timeline |
| Balchem |
| EXXON MOBIL P |
Balchem and EXXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balchem and EXXON
The main advantage of trading using opposite Balchem and EXXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balchem position performs unexpectedly, EXXON 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 EXXON will offset losses from the drop in EXXON's long position.| Balchem vs. Sensient Technologies | Balchem vs. Innospec | Balchem vs. Minerals Technologies | Balchem vs. Oil Dri |
| EXXON vs. Harmony Gold Mining | EXXON vs. Olympic Steel | EXXON vs. CF Industries Holdings | EXXON vs. Balchem |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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