Correlation Between Exxon and Black Mountain
Can any of the company-specific risk be diversified away by investing in both Exxon and Black Mountain 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 Black Mountain 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 Black Mountain Acquisition, you can compare the effects of market volatilities on Exxon and Black Mountain 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 Black Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Black Mountain.
Diversification Opportunities for Exxon and Black Mountain
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and Black is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Black Mountain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Mountain Acqui 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 Black Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Mountain Acqui has no effect on the direction of Exxon i.e., Exxon and Black Mountain go up and down completely randomly.
Pair Corralation between Exxon and Black Mountain
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 Together |
| Strength | Significant |
| Accuracy | 0.4% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Black Mountain Acquisition
Performance |
| Timeline |
| Exxon Mobil Corp |
| Black Mountain Acqui |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Black Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Black Mountain
The main advantage of trading using opposite Exxon and Black Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Black Mountain 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 Black Mountain will offset losses from the drop in Black Mountain's long position.| Exxon vs. Shell PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Cenovus Energy | Exxon vs. Petrleo Brasileiro SA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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