Correlation Between Exxon and Butler National
Can any of the company-specific risk be diversified away by investing in both Exxon and Butler National 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 Butler National 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 Butler National Corp, you can compare the effects of market volatilities on Exxon and Butler National 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 Butler National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Butler National.
Diversification Opportunities for Exxon and Butler National
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Butler is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Butler National Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Butler National Corp 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 Butler National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Butler National Corp has no effect on the direction of Exxon i.e., Exxon and Butler National go up and down completely randomly.
Pair Corralation between Exxon and Butler National
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.47 times more return on investment than Butler National. However, Exxon Mobil Corp is 2.15 times less risky than Butler National. It trades about 0.32 of its potential returns per unit of risk. Butler National Corp is currently generating about -0.02 per unit of risk. If you would invest 10,630 in Exxon Mobil Corp on October 23, 2024 and sell it today you would earn a total of 602.00 from holding Exxon Mobil Corp or generate 5.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Butler National Corp
Performance |
| Timeline |
| Exxon Mobil Corp |
| Butler National Corp |
Exxon and Butler National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Butler National
The main advantage of trading using opposite Exxon and Butler National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Butler National 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 Butler National will offset losses from the drop in Butler National's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Butler National vs. Ballistic Recovery Systems | Butler National vs. BAB Inc | Butler National vs. Optex Systems Holdings, | Butler National vs. Smith Midland Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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