Correlation Between Galp Energa and Exxon
Can any of the company-specific risk be diversified away by investing in both Galp Energa 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 Galp Energa and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Galp Energa and Exxon Mobil Corp, you can compare the effects of market volatilities on Galp Energa 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 Galp Energa with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Galp Energa and Exxon.
Diversification Opportunities for Galp Energa and Exxon
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Galp and Exxon is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Galp Energa 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 Galp Energa 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 Galp Energa 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 Galp Energa i.e., Galp Energa and Exxon go up and down completely randomly.
Pair Corralation between Galp Energa and Exxon
Assuming the 90 days horizon Galp Energa is expected to generate 1.43 times more return on investment than Exxon. However, Galp Energa is 1.43 times more volatile than Exxon Mobil Corp. It trades about 0.07 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.04 per unit of risk. If you would invest 539.00 in Galp Energa on September 4, 2024 and sell it today you would earn a total of 278.00 from holding Galp Energa or generate 51.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Galp Energa vs. Exxon Mobil Corp
Performance |
| Timeline |
| Galp Energa |
| Exxon Mobil Corp |
Galp Energa and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Galp Energa and Exxon
The main advantage of trading using opposite Galp Energa and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Galp Energa 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.| Galp Energa vs. Shell PLC ADR | Galp Energa vs. Equinor ASA ADR | Galp Energa vs. BP PLC ADR | Galp Energa vs. Eni SpA ADR |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |