Correlation Between Exxon and Serabi Gold
Can any of the company-specific risk be diversified away by investing in both Exxon and Serabi Gold 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 Exxon and Serabi Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXXON MOBIL CDR and Serabi Gold PLC, you can compare the effects of market volatilities on Exxon and Serabi Gold 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 Exxon with a short position of Serabi Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Serabi Gold.
Diversification Opportunities for Exxon and Serabi Gold
-0.82 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxon and Serabi is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Serabi Gold PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serabi Gold PLC and Exxon 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 EXXON MOBIL CDR are associated (or correlated) with Serabi Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serabi Gold PLC has no effect on the direction of Exxon i.e., Exxon and Serabi Gold go up and down completely randomly.
Pair Corralation between Exxon and Serabi Gold
Assuming the 90 days trading horizon Exxon is expected to generate 14.31 times less return on investment than Serabi Gold. But when comparing it to its historical volatility, EXXON MOBIL CDR is 1.92 times less risky than Serabi Gold. It trades about 0.02 of its potential returns per unit of risk. Serabi Gold PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 201.00 in Serabi Gold PLC on November 1, 2024 and sell it today you would earn a total of 27.00 from holding Serabi Gold PLC or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
EXXON MOBIL CDR vs. Serabi Gold PLC
Performance |
| Timeline |
| EXXON MOBIL CDR |
| Serabi Gold PLC |
Exxon and Serabi Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Serabi Gold
The main advantage of trading using opposite Exxon and Serabi Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Serabi Gold 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 Serabi Gold will offset losses from the drop in Serabi Gold's long position.| Exxon vs. Costco Wholesale Corp | Exxon vs. Pollard Banknote Limited | Exxon vs. North American Financial | Exxon vs. iA Financial |
| Serabi Gold vs. Plata Latina Minerals | Serabi Gold vs. RT Minerals Corp | Serabi Gold vs. Rackla Metals | Serabi Gold vs. Sulliden Minerals SA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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