Correlation Between Exxon and Avantis Real
Can any of the company-specific risk be diversified away by investing in both Exxon and Avantis Real 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 Avantis Real 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 Avantis Real Estate, you can compare the effects of market volatilities on Exxon and Avantis Real 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 Avantis Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Avantis Real.
Diversification Opportunities for Exxon and Avantis Real
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Avantis is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Avantis Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avantis Real Estate 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 Avantis Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avantis Real Estate has no effect on the direction of Exxon i.e., Exxon and Avantis Real go up and down completely randomly.
Pair Corralation between Exxon and Avantis Real
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.37 times more return on investment than Avantis Real. However, Exxon is 1.37 times more volatile than Avantis Real Estate. It trades about 0.07 of its potential returns per unit of risk. Avantis Real Estate is currently generating about 0.07 per unit of risk. If you would invest 9,935 in Exxon Mobil Corp on August 26, 2024 and sell it today you would earn a total of 2,244 from holding Exxon Mobil Corp or generate 22.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Avantis Real Estate
Performance |
| Timeline |
| Exxon Mobil Corp |
| Avantis Real Estate |
Exxon and Avantis Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Avantis Real
The main advantage of trading using opposite Exxon and Avantis Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Avantis Real 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 Avantis Real will offset losses from the drop in Avantis Real's long position.The idea behind Exxon Mobil Corp and Avantis Real Estate 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.| Avantis Real vs. iShares International Treasury | Avantis Real vs. iShares 1 3 Year | Avantis Real vs. SPDR Dow Jones | Avantis Real vs. iShares MSCI Emerging |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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