Correlation Between Exxon and ETF Opportunities
Can any of the company-specific risk be diversified away by investing in both Exxon and ETF Opportunities 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 ETF Opportunities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and ETF Opportunities Trust, you can compare the effects of market volatilities on Exxon and ETF Opportunities 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 ETF Opportunities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ETF Opportunities.
Diversification Opportunities for Exxon and ETF Opportunities
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and ETF is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ETF Opportunities Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Opportunities Trust 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 Corp are associated (or correlated) with ETF Opportunities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Opportunities Trust has no effect on the direction of Exxon i.e., Exxon and ETF Opportunities go up and down completely randomly.
Pair Corralation between Exxon and ETF Opportunities
Considering the 90-day investment horizon Exxon is expected to generate 4.79 times less return on investment than ETF Opportunities. In addition to that, Exxon is 1.51 times more volatile than ETF Opportunities Trust. It trades about 0.02 of its total potential returns per unit of risk. ETF Opportunities Trust is currently generating about 0.13 per unit of volatility. If you would invest 3,971 in ETF Opportunities Trust on August 29, 2024 and sell it today you would earn a total of 594.00 from holding ETF Opportunities Trust or generate 14.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. ETF Opportunities Trust
Performance |
| Timeline |
| Exxon Mobil Corp |
| ETF Opportunities Trust |
Exxon and ETF Opportunities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ETF Opportunities
The main advantage of trading using opposite Exxon and ETF Opportunities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, ETF Opportunities 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 ETF Opportunities will offset losses from the drop in ETF Opportunities' long position.The idea behind Exxon Mobil Corp and ETF Opportunities Trust 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.| ETF Opportunities vs. JPMorgan BetaBuilders International | ETF Opportunities vs. JPMorgan Core Plus | ETF Opportunities vs. JPMorgan BetaBuilders Canada | ETF Opportunities vs. JPMorgan Emerging Markets |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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