Correlation Between Exxon and Spanish Mountain
Can any of the company-specific risk be diversified away by investing in both Exxon and Spanish Mountain 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 Spanish Mountain 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 Spanish Mountain Gold, you can compare the effects of market volatilities on Exxon and Spanish Mountain 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 Spanish Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Spanish Mountain.
Diversification Opportunities for Exxon and Spanish Mountain
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Spanish is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Spanish Mountain Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spanish Mountain Gold 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 Spanish Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spanish Mountain Gold has no effect on the direction of Exxon i.e., Exxon and Spanish Mountain go up and down completely randomly.
Pair Corralation between Exxon and Spanish Mountain
Assuming the 90 days trading horizon EXXON MOBIL CDR is expected to generate 1.09 times more return on investment than Spanish Mountain. However, Exxon is 1.09 times more volatile than Spanish Mountain Gold. It trades about 0.01 of its potential returns per unit of risk. Spanish Mountain Gold is currently generating about 0.0 per unit of risk. If you would invest 3,058 in EXXON MOBIL CDR on September 2, 2024 and sell it today you would lose (845.00) from holding EXXON MOBIL CDR or give up 27.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.38% |
| Values | Daily Returns |
EXXON MOBIL CDR vs. Spanish Mountain Gold
Performance |
| Timeline |
| EXXON MOBIL CDR |
| Spanish Mountain Gold |
Exxon and Spanish Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Spanish Mountain
The main advantage of trading using opposite Exxon and Spanish Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Spanish Mountain 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 Spanish Mountain will offset losses from the drop in Spanish Mountain's long position.| Exxon vs. Western Investment | Exxon vs. Upstart Investments | Exxon vs. Atrium Mortgage Investment | Exxon vs. 2028 Investment Grade |
| Spanish Mountain vs. Strikepoint Gold | Spanish Mountain vs. Kore Mining | Spanish Mountain vs. Unigold | Spanish Mountain vs. Kootenay Silver |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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