Correlation Between Exxon Mobil and Chevron
Can any of the company-specific risk be diversified away by investing in both Exxon Mobil and Chevron 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 Chevron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil and Chevron, you can compare the effects of market volatilities on Exxon Mobil and Chevron 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 Chevron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon Mobil and Chevron.
Diversification Opportunities for Exxon Mobil and Chevron
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exxon and Chevron is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil and Chevron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron 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 Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of Exxon Mobil i.e., Exxon Mobil and Chevron go up and down completely randomly.
Pair Corralation between Exxon Mobil and Chevron
If you would invest 7,816 in Exxon Mobil on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Exxon Mobil or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Exxon Mobil vs. Chevron
Performance |
| Timeline |
| Exxon Mobil |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chevron |
Exxon Mobil and Chevron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon Mobil and Chevron
The main advantage of trading using opposite Exxon Mobil and Chevron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon Mobil position performs unexpectedly, Chevron 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 Chevron will offset losses from the drop in Chevron's long position.| Exxon Mobil vs. Paycom Software | Exxon Mobil vs. Liberty Broadband | Exxon Mobil vs. Align Technology | Exxon Mobil vs. Nordon Indstrias Metalrgicas |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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