Correlation Between Exxon and Columbia Income
Can any of the company-specific risk be diversified away by investing in both Exxon and Columbia Income 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 Columbia Income 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 Columbia Income Builder, you can compare the effects of market volatilities on Exxon and Columbia Income 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 Columbia Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Columbia Income.
Diversification Opportunities for Exxon and Columbia Income
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exxon and Columbia is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Columbia Income Builder in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Income Builder 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 Columbia Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Income Builder has no effect on the direction of Exxon i.e., Exxon and Columbia Income go up and down completely randomly.
Pair Corralation between Exxon and Columbia Income
If you would invest 1,184 in Columbia Income Builder on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Columbia Income Builder or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Columbia Income Builder
Performance |
| Timeline |
| Exxon Mobil Corp |
| Columbia Income Builder |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Exxon and Columbia Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Columbia Income
The main advantage of trading using opposite Exxon and Columbia Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Columbia Income 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 Columbia Income will offset losses from the drop in Columbia Income's long position.| Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. TotalEnergies SE ADR |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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