Correlation Between Exxon and Koninklijke Ahold
Can any of the company-specific risk be diversified away by investing in both Exxon and Koninklijke Ahold 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 Koninklijke Ahold 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 Koninklijke Ahold Delhaize, you can compare the effects of market volatilities on Exxon and Koninklijke Ahold 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 Koninklijke Ahold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Koninklijke Ahold.
Diversification Opportunities for Exxon and Koninklijke Ahold
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Koninklijke is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Koninklijke Ahold Delhaize in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koninklijke Ahold 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 Koninklijke Ahold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koninklijke Ahold has no effect on the direction of Exxon i.e., Exxon and Koninklijke Ahold go up and down completely randomly.
Pair Corralation between Exxon and Koninklijke Ahold
Considering the 90-day investment horizon Exxon is expected to generate 6.29 times less return on investment than Koninklijke Ahold. In addition to that, Exxon is 1.59 times more volatile than Koninklijke Ahold Delhaize. It trades about 0.03 of its total potential returns per unit of risk. Koninklijke Ahold Delhaize is currently generating about 0.35 per unit of volatility. If you would invest 3,169 in Koninklijke Ahold Delhaize on August 31, 2024 and sell it today you would earn a total of 297.00 from holding Koninklijke Ahold Delhaize or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 8.56% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Koninklijke Ahold Delhaize
Performance |
| Timeline |
| Exxon Mobil Corp |
| Koninklijke Ahold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Koninklijke Ahold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Koninklijke Ahold
The main advantage of trading using opposite Exxon and Koninklijke Ahold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Koninklijke Ahold 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 Koninklijke Ahold will offset losses from the drop in Koninklijke Ahold's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| Koninklijke Ahold vs. Sendas Distribuidora SA | Koninklijke Ahold vs. Dingdong ADR | Koninklijke Ahold vs. Albertsons Companies | Koninklijke Ahold vs. Village Super Market |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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