Correlation Between Exxon and Themes Robotics
Can any of the company-specific risk be diversified away by investing in both Exxon and Themes Robotics 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 Themes Robotics 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 Themes Robotics Automation, you can compare the effects of market volatilities on Exxon and Themes Robotics 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 Themes Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Themes Robotics.
Diversification Opportunities for Exxon and Themes Robotics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and Themes is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Themes Robotics Automation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Themes Robotics Auto 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 Themes Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Themes Robotics Auto has no effect on the direction of Exxon i.e., Exxon and Themes Robotics go up and down completely randomly.
Pair Corralation between Exxon and Themes Robotics
Considering the 90-day investment horizon Exxon is expected to generate 1.49 times less return on investment than Themes Robotics. But when comparing it to its historical volatility, Exxon Mobil Corp is 1.17 times less risky than Themes Robotics. It trades about 0.04 of its potential returns per unit of risk. Themes Robotics Automation is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,523 in Themes Robotics Automation on August 26, 2024 and sell it today you would earn a total of 244.00 from holding Themes Robotics Automation or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 30.58% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Themes Robotics Automation
Performance |
| Timeline |
| Exxon Mobil Corp |
| Themes Robotics Auto |
Exxon and Themes Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Themes Robotics
The main advantage of trading using opposite Exxon and Themes Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Themes Robotics 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 Themes Robotics will offset losses from the drop in Themes Robotics' long position.| Exxon vs. Shell PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Cenovus Energy | Exxon vs. Petrleo Brasileiro SA |
| Themes Robotics vs. Invesco DWA Utilities | Themes Robotics vs. Invesco Dynamic Large | Themes Robotics vs. Invesco Dynamic Large | Themes Robotics vs. HUMANA INC |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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