Correlation Between Exxon and CSI Compressco
Can any of the company-specific risk be diversified away by investing in both Exxon and CSI Compressco 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 CSI Compressco 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 CSI Compressco LP, you can compare the effects of market volatilities on Exxon and CSI Compressco 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 CSI Compressco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and CSI Compressco.
Diversification Opportunities for Exxon and CSI Compressco
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and CSI is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and CSI Compressco LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSI Compressco LP 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 CSI Compressco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSI Compressco LP has no effect on the direction of Exxon i.e., Exxon and CSI Compressco go up and down completely randomly.
Pair Corralation between Exxon and CSI Compressco
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.44 times more return on investment than CSI Compressco. However, Exxon Mobil Corp is 2.29 times less risky than CSI Compressco. It trades about 0.03 of its potential returns per unit of risk. CSI Compressco LP is currently generating about -0.03 per unit of risk. If you would invest 9,920 in Exxon Mobil Corp on September 2, 2024 and sell it today you would earn a total of 1,876 from holding Exxon Mobil Corp or generate 18.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 31.05% |
| Values | Daily Returns |
Exxon Mobil Corp vs. CSI Compressco LP
Performance |
| Timeline |
| Exxon Mobil Corp |
| CSI Compressco LP |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and CSI Compressco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and CSI Compressco
The main advantage of trading using opposite Exxon and CSI Compressco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, CSI Compressco 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 CSI Compressco will offset losses from the drop in CSI Compressco's long position.The idea behind Exxon Mobil Corp and CSI Compressco LP 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.| CSI Compressco vs. Geospace Technologies | CSI Compressco vs. MRC Global | CSI Compressco vs. North American Construction | CSI Compressco vs. Natural Gas Services |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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