Correlation Between International Business and EXXON
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By analyzing existing cross correlation between International Business Machines and EXXON MOBIL P, you can compare the effects of market volatilities on International Business 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 International Business with a short position of EXXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Business and EXXON.
Diversification Opportunities for International Business and EXXON
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between International and EXXON is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and EXXON MOBIL P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXXON MOBIL P and International Business 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 International Business Machines 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 P has no effect on the direction of International Business i.e., International Business and EXXON go up and down completely randomly.
Pair Corralation between International Business and EXXON
Considering the 90-day investment horizon International Business is expected to generate 1.08 times less return on investment than EXXON. In addition to that, International Business is 1.14 times more volatile than EXXON MOBIL P. It trades about 0.09 of its total potential returns per unit of risk. EXXON MOBIL P is currently generating about 0.12 per unit of volatility. If you would invest 7,024 in EXXON MOBIL P on August 25, 2024 and sell it today you would earn a total of 227.00 from holding EXXON MOBIL P or generate 3.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Business Machine vs. EXXON MOBIL P
Performance |
| Timeline |
| International Business |
| EXXON MOBIL P |
International Business and EXXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Business and EXXON
The main advantage of trading using opposite International Business and EXXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Business 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.| International Business vs. CDW Corp | International Business vs. Eshallgo Class A | International Business vs. Amtech Systems | International Business vs. Gold Fields Ltd |
| EXXON vs. Albertsons Companies | EXXON vs. Beyond Meat | EXXON vs. Marfrig Global Foods | EXXON vs. Acumen Pharmaceuticals |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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