Correlation Between GMxico Transportes and Exxon
Can any of the company-specific risk be diversified away by investing in both GMxico Transportes 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 GMxico Transportes and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GMxico Transportes SAB and Exxon Mobil, you can compare the effects of market volatilities on GMxico Transportes 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 GMxico Transportes with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GMxico Transportes and Exxon.
Diversification Opportunities for GMxico Transportes and Exxon
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GMxico and Exxon is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding GMxico Transportes SAB and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil and GMxico Transportes 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 GMxico Transportes SAB 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 has no effect on the direction of GMxico Transportes i.e., GMxico Transportes and Exxon go up and down completely randomly.
Pair Corralation between GMxico Transportes and Exxon
Assuming the 90 days trading horizon GMxico Transportes SAB is expected to under-perform the Exxon. In addition to that, GMxico Transportes is 1.08 times more volatile than Exxon Mobil. It trades about -0.01 of its total potential returns per unit of risk. Exxon Mobil is currently generating about 0.06 per unit of volatility. If you would invest 178,680 in Exxon Mobil on September 1, 2024 and sell it today you would earn a total of 61,820 from holding Exxon Mobil or generate 34.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
GMxico Transportes SAB vs. Exxon Mobil
Performance |
| Timeline |
| GMxico Transportes SAB |
| Exxon Mobil |
GMxico Transportes and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GMxico Transportes and Exxon
The main advantage of trading using opposite GMxico Transportes and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GMxico Transportes 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.| GMxico Transportes vs. Cognizant Technology Solutions | GMxico Transportes vs. McEwen Mining | GMxico Transportes vs. DXC Technology | GMxico Transportes vs. Micron Technology |
| Exxon vs. Grupo Carso SAB | Exxon vs. Taiwan Semiconductor Manufacturing | Exxon vs. Grupo Sports World | Exxon vs. Applied Materials |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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