Correlation Between Exxon Mobil and Biogen
Can any of the company-specific risk be diversified away by investing in both Exxon Mobil and Biogen 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 Exxon Mobil and Biogen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil and Biogen Inc, you can compare the effects of market volatilities on Exxon Mobil and Biogen 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 Exxon Mobil with a short position of Biogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon Mobil and Biogen.
Diversification Opportunities for Exxon Mobil and Biogen
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxon and Biogen is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil and Biogen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biogen Inc and Exxon Mobil 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 Exxon Mobil are associated (or correlated) with Biogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biogen Inc has no effect on the direction of Exxon Mobil i.e., Exxon Mobil and Biogen go up and down completely randomly.
Pair Corralation between Exxon Mobil and Biogen
Assuming the 90 days trading horizon Exxon Mobil is expected to generate 0.79 times more return on investment than Biogen. However, Exxon Mobil is 1.27 times less risky than Biogen. It trades about 0.11 of its potential returns per unit of risk. Biogen Inc is currently generating about -0.03 per unit of risk. If you would invest 6,176 in Exxon Mobil on August 24, 2024 and sell it today you would earn a total of 2,692 from holding Exxon Mobil or generate 43.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
Exxon Mobil vs. Biogen Inc
Performance |
| Timeline |
| Exxon Mobil |
| Biogen Inc |
Exxon Mobil and Biogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon Mobil and Biogen
The main advantage of trading using opposite Exxon Mobil and Biogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon Mobil position performs unexpectedly, Biogen 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 Biogen will offset losses from the drop in Biogen's long position.| Exxon Mobil vs. Planet Fitness | Exxon Mobil vs. Metalurgica Gerdau SA | Exxon Mobil vs. UnitedHealth Group Incorporated | Exxon Mobil vs. Paycom Software |
| Biogen vs. Brpr Corporate Offices | Biogen vs. Verizon Communications | Biogen vs. Metalurgica Gerdau SA | Biogen vs. Charter Communications |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |