Correlation Between Hoteles City and Exxon
Can any of the company-specific risk be diversified away by investing in both Hoteles City 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 Hoteles City and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hoteles City Express and Exxon Mobil, you can compare the effects of market volatilities on Hoteles City 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 Hoteles City with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hoteles City and Exxon.
Diversification Opportunities for Hoteles City and Exxon
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hoteles and Exxon is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hoteles City Express and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil and Hoteles City 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 Hoteles City Express 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 Hoteles City i.e., Hoteles City and Exxon go up and down completely randomly.
Pair Corralation between Hoteles City and Exxon
Assuming the 90 days trading horizon Hoteles City is expected to generate 5.63 times less return on investment than Exxon. In addition to that, Hoteles City is 1.29 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 0.07 per unit of volatility. If you would invest 236,143 in Exxon Mobil on September 3, 2024 and sell it today you would earn a total of 4,357 from holding Exxon Mobil or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hoteles City Express vs. Exxon Mobil
Performance |
| Timeline |
| Hoteles City Express |
| Exxon Mobil |
Hoteles City and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hoteles City and Exxon
The main advantage of trading using opposite Hoteles City and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hoteles City 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.| Hoteles City vs. Controladora Vuela Compaa | Hoteles City vs. Alsea SAB de | Hoteles City vs. Nemak S A | Hoteles City vs. Grupo Comercial Chedraui |
| Exxon vs. GMxico Transportes SAB | Exxon vs. Deutsche Bank Aktiengesellschaft | Exxon vs. Grupo Hotelero Santa | Exxon vs. Hoteles City Express |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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