Correlation Between Crescent Energy and Exxon
Can any of the company-specific risk be diversified away by investing in both Crescent Energy and Exxon 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 Crescent Energy and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crescent Energy Co and Exxon Mobil Corp, you can compare the effects of market volatilities on Crescent Energy 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 Crescent Energy with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crescent Energy and Exxon.
Diversification Opportunities for Crescent Energy and Exxon
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Crescent and Exxon is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Crescent Energy Co and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp and Crescent Energy 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 Crescent Energy Co 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 Corp has no effect on the direction of Crescent Energy i.e., Crescent Energy and Exxon go up and down completely randomly.
Pair Corralation between Crescent Energy and Exxon
Given the investment horizon of 90 days Crescent Energy Co is expected to generate 2.98 times more return on investment than Exxon. However, Crescent Energy is 2.98 times more volatile than Exxon Mobil Corp. It trades about 0.13 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about -0.32 per unit of risk. If you would invest 1,420 in Crescent Energy Co on October 7, 2024 and sell it today you would earn a total of 85.00 from holding Crescent Energy Co or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crescent Energy Co vs. Exxon Mobil Corp
Performance |
| Timeline |
| Crescent Energy |
| Exxon Mobil Corp |
Crescent Energy and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crescent Energy and Exxon
The main advantage of trading using opposite Crescent Energy and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crescent Energy 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.| Crescent Energy vs. Vital Energy | Crescent Energy vs. Permian Resources | Crescent Energy vs. Magnolia Oil Gas | Crescent Energy vs. Ring Energy |
| Exxon vs. Chevron Corp | Exxon vs. Aquagold International | Exxon vs. Alibaba Group Holding | Exxon vs. Banco Bradesco SA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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