Correlation Between Exxon and Alternative Investment
Can any of the company-specific risk be diversified away by investing in both Exxon and Alternative Investment 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 Alternative Investment 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 Alternative Investment, you can compare the effects of market volatilities on Exxon and Alternative Investment 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 Alternative Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Alternative Investment.
Diversification Opportunities for Exxon and Alternative Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxon and Alternative is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Alternative Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternative Investment 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 Alternative Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternative Investment has no effect on the direction of Exxon i.e., Exxon and Alternative Investment go up and down completely randomly.
Pair Corralation between Exxon and Alternative Investment
If you would invest 188.00 in Alternative Investment on November 18, 2024 and sell it today you would earn a total of 0.00 from holding Alternative Investment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Alternative Investment
Performance |
| Timeline |
| Exxon Mobil Corp |
| Alternative Investment |
Exxon and Alternative Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Alternative Investment
The main advantage of trading using opposite Exxon and Alternative Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Alternative Investment 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 Alternative Investment will offset losses from the drop in Alternative Investment's long position.| Exxon vs. TotalEnergies SE ADR | Exxon vs. Equinor ASA ADR | Exxon vs. Petrleo Brasileiro SA | Exxon vs. Ecopetrol SA ADR |
| Alternative Investment vs. RH | Alternative Investment vs. Steven Madden | Alternative Investment vs. World Houseware Limited | Alternative Investment vs. Procter Gamble |
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 Stocks Directory module to find actively traded stocks across global markets.
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