Correlation Between Exxon and Astra Energy
Can any of the company-specific risk be diversified away by investing in both Exxon and Astra Energy 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 Astra Energy 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 Astra Energy, you can compare the effects of market volatilities on Exxon and Astra Energy 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 Astra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Astra Energy.
Diversification Opportunities for Exxon and Astra Energy
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exxon and Astra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Astra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Energy 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 Astra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Energy has no effect on the direction of Exxon i.e., Exxon and Astra Energy go up and down completely randomly.
Pair Corralation between Exxon and Astra Energy
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Astra Energy. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 6.94 times less risky than Astra Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Astra Energy is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7.80 in Astra Energy on November 4, 2024 and sell it today you would earn a total of 3.20 from holding Astra Energy or generate 41.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Astra Energy
Performance |
| Timeline |
| Exxon Mobil Corp |
| Astra Energy |
Exxon and Astra Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Astra Energy
The main advantage of trading using opposite Exxon and Astra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Astra Energy 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 Astra Energy will offset losses from the drop in Astra Energy's long position.| Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. TotalEnergies SE ADR |
| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Brenmiller Energy Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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