Correlation Between Exxon and Conyers Park
Can any of the company-specific risk be diversified away by investing in both Exxon and Conyers Park 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 Conyers Park 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 Conyers Park III, you can compare the effects of market volatilities on Exxon and Conyers Park 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 Conyers Park. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Conyers Park.
Diversification Opportunities for Exxon and Conyers Park
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Conyers is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Conyers Park III in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conyers Park III 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 Conyers Park. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conyers Park III has no effect on the direction of Exxon i.e., Exxon and Conyers Park go up and down completely randomly.
Pair Corralation between Exxon and Conyers Park
If you would invest 11,793 in Exxon Mobil Corp on August 29, 2024 and sell it today you would earn a total of 4.00 from holding Exxon Mobil Corp or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Conyers Park III
Performance |
| Timeline |
| Exxon Mobil Corp |
| Conyers Park III |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Conyers Park Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Conyers Park
The main advantage of trading using opposite Exxon and Conyers Park positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Conyers Park 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 Conyers Park will offset losses from the drop in Conyers Park's long position.The idea behind Exxon Mobil Corp and Conyers Park III 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.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 Transaction History module to view history of all your transactions and understand their impact on performance.
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