Correlation Between Exxon and ProShares MSCI
Can any of the company-specific risk be diversified away by investing in both Exxon and ProShares MSCI 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 ProShares MSCI 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 ProShares MSCI Transformational, you can compare the effects of market volatilities on Exxon and ProShares MSCI 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 ProShares MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ProShares MSCI.
Diversification Opportunities for Exxon and ProShares MSCI
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and ProShares is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ProShares MSCI Transformationa in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares MSCI Trans 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 ProShares MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares MSCI Trans has no effect on the direction of Exxon i.e., Exxon and ProShares MSCI go up and down completely randomly.
Pair Corralation between Exxon and ProShares MSCI
Considering the 90-day investment horizon Exxon is expected to generate 1.79 times less return on investment than ProShares MSCI. In addition to that, Exxon is 1.62 times more volatile than ProShares MSCI Transformational. It trades about 0.05 of its total potential returns per unit of risk. ProShares MSCI Transformational is currently generating about 0.14 per unit of volatility. If you would invest 4,558 in ProShares MSCI Transformational on August 30, 2024 and sell it today you would earn a total of 104.00 from holding ProShares MSCI Transformational or generate 2.28% 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. ProShares MSCI Transformationa
Performance |
| Timeline |
| Exxon Mobil Corp |
| ProShares MSCI Trans |
Exxon and ProShares MSCI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ProShares MSCI
The main advantage of trading using opposite Exxon and ProShares MSCI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, ProShares MSCI 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 ProShares MSCI will offset losses from the drop in ProShares MSCI's long position.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
| ProShares MSCI vs. Innovator Loup Frontier | ProShares MSCI vs. ProShares Pet Care | ProShares MSCI vs. Global X Telemedicine | ProShares MSCI vs. ProShares Online Retail |
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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