Correlation Between Empire Petroleum and Exxon
Can any of the company-specific risk be diversified away by investing in both Empire Petroleum 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 Empire Petroleum and Exxon 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 Exxon Mobil Corp, you can compare the effects of market volatilities on Empire Petroleum 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 Empire Petroleum with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Empire Petroleum and Exxon.
Diversification Opportunities for Empire Petroleum and Exxon
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Empire and Exxon is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Empire Petroleum Corp 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 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 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 Empire Petroleum i.e., Empire Petroleum and Exxon go up and down completely randomly.
Pair Corralation between Empire Petroleum and Exxon
Allowing for the 90-day total investment horizon Empire Petroleum Corp is expected to under-perform the Exxon. In addition to that, Empire Petroleum is 3.11 times more volatile than Exxon Mobil Corp. It trades about -0.28 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.08 per unit of volatility. If you would invest 10,757 in Exxon Mobil Corp on November 1, 2024 and sell it today you would earn a total of 200.00 from holding Exxon Mobil Corp or generate 1.86% 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. Exxon Mobil Corp
Performance |
| Timeline |
| Empire Petroleum Corp |
| Exxon Mobil Corp |
Empire Petroleum and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Empire Petroleum and Exxon
The main advantage of trading using opposite Empire Petroleum and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Empire Petroleum 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.| Empire Petroleum vs. PHX Minerals | Empire Petroleum vs. Mexco Energy | Empire Petroleum vs. Granite Ridge Resources | Empire Petroleum vs. XXL Energy Corp |
| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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