Correlation Between Exxon and APAC Resources
Can any of the company-specific risk be diversified away by investing in both Exxon and APAC Resources 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 APAC Resources 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 APAC Resources Limited, you can compare the effects of market volatilities on Exxon and APAC Resources 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 APAC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and APAC Resources.
Diversification Opportunities for Exxon and APAC Resources
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and APAC is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and APAC Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APAC Resources 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 APAC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APAC Resources has no effect on the direction of Exxon i.e., Exxon and APAC Resources go up and down completely randomly.
Pair Corralation between Exxon and APAC Resources
If you would invest 11,583 in Exxon Mobil Corp on September 1, 2024 and sell it today you would earn a total of 213.00 from holding Exxon Mobil Corp or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 71.43% |
| Values | Daily Returns |
Exxon Mobil Corp vs. APAC Resources Limited
Performance |
| Timeline |
| Exxon Mobil Corp |
| APAC Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Exxon and APAC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and APAC Resources
The main advantage of trading using opposite Exxon and APAC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, APAC Resources 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 APAC Resources will offset losses from the drop in APAC Resources' long position.The idea behind Exxon Mobil Corp and APAC Resources Limited 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.| APAC Resources vs. ABS CBN Holdings | APAC Resources vs. Ameritrust Corp | APAC Resources vs. Armada Mercantile | APAC Resources vs. Arcane Crypto AB |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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