Correlation Between HAMMONIA Schiffsholding and Exxon Mobil
Can any of the company-specific risk be diversified away by investing in both HAMMONIA Schiffsholding and Exxon Mobil 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 HAMMONIA Schiffsholding and Exxon Mobil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HAMMONIA Schiffsholding AG and Exxon Mobil, you can compare the effects of market volatilities on HAMMONIA Schiffsholding and Exxon Mobil 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 HAMMONIA Schiffsholding with a short position of Exxon Mobil. Check out your portfolio center. Please also check ongoing floating volatility patterns of HAMMONIA Schiffsholding and Exxon Mobil.
Diversification Opportunities for HAMMONIA Schiffsholding and Exxon Mobil
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HAMMONIA and Exxon is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding HAMMONIA Schiffsholding AG and Exxon Mobil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil and HAMMONIA Schiffsholding 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 HAMMONIA Schiffsholding AG are associated (or correlated) with Exxon Mobil. 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 HAMMONIA Schiffsholding i.e., HAMMONIA Schiffsholding and Exxon Mobil go up and down completely randomly.
Pair Corralation between HAMMONIA Schiffsholding and Exxon Mobil
Assuming the 90 days trading horizon HAMMONIA Schiffsholding is expected to generate 5.67 times less return on investment than Exxon Mobil. In addition to that, HAMMONIA Schiffsholding is 1.42 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 0.08 per unit of volatility. If you would invest 10,846 in Exxon Mobil on August 30, 2024 and sell it today you would earn a total of 304.00 from holding Exxon Mobil or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
HAMMONIA Schiffsholding AG vs. Exxon Mobil
Performance |
| Timeline |
| HAMMONIA Schiffsholding |
| Exxon Mobil |
HAMMONIA Schiffsholding and Exxon Mobil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HAMMONIA Schiffsholding and Exxon Mobil
The main advantage of trading using opposite HAMMONIA Schiffsholding and Exxon Mobil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HAMMONIA Schiffsholding position performs unexpectedly, Exxon Mobil 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 Mobil will offset losses from the drop in Exxon Mobil's long position.The idea behind HAMMONIA Schiffsholding AG and Exxon Mobil pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Exxon Mobil vs. Apple Inc | Exxon Mobil vs. Apple Inc | Exxon Mobil vs. Apple Inc | Exxon Mobil vs. Apple Inc |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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