Correlation Between Exxon and Total Energy
Can any of the company-specific risk be diversified away by investing in both Exxon and Total Energy 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 Total Energy 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 Total Energy Services, you can compare the effects of market volatilities on Exxon and Total Energy 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 Total Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Total Energy.
Diversification Opportunities for Exxon and Total Energy
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Total is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Total Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Energy Services 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 Total Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Energy Services has no effect on the direction of Exxon i.e., Exxon and Total Energy go up and down completely randomly.
Pair Corralation between Exxon and Total Energy
Assuming the 90 days trading horizon Exxon is expected to generate 3.22 times less return on investment than Total Energy. But when comparing it to its historical volatility, EXXON MOBIL CDR is 1.32 times less risky than Total Energy. It trades about 0.02 of its potential returns per unit of risk. Total Energy Services is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 896.00 in Total Energy Services on November 3, 2024 and sell it today you would earn a total of 222.00 from holding Total Energy Services or generate 24.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXXON MOBIL CDR vs. Total Energy Services
Performance |
| Timeline |
| EXXON MOBIL CDR |
| Total Energy Services |
Exxon and Total Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Total Energy
The main advantage of trading using opposite Exxon and Total Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Total Energy 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 Total Energy will offset losses from the drop in Total Energy's long position.| Exxon vs. Northstar Clean Technologies | Exxon vs. CVW CleanTech | Exxon vs. UnitedHealth Group CDR | Exxon vs. Sun Peak Metals |
| Total Energy vs. PHX Energy Services | Total Energy vs. Pason Systems | Total Energy vs. CES Energy Solutions | Total Energy vs. Western Energy Services |
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.
Other Complementary Tools
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |