Correlation Between Exxon and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Exxon and Cornerstone Strategic 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 Cornerstone Strategic 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 Cornerstone Strategic Return, you can compare the effects of market volatilities on Exxon and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Cornerstone Strategic.
Diversification Opportunities for Exxon and Cornerstone Strategic
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and Cornerstone is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Exxon i.e., Exxon and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Exxon and Cornerstone Strategic
Considering the 90-day investment horizon Exxon is expected to generate 1.82 times less return on investment than Cornerstone Strategic. In addition to that, Exxon is 1.29 times more volatile than Cornerstone Strategic Return. It trades about 0.07 of its total potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.16 per unit of volatility. If you would invest 612.00 in Cornerstone Strategic Return on August 24, 2024 and sell it today you would earn a total of 279.00 from holding Cornerstone Strategic Return or generate 45.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Cornerstone Strategic Return
Performance |
| Timeline |
| Exxon Mobil Corp |
| Cornerstone Strategic |
Exxon and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Cornerstone Strategic
The main advantage of trading using opposite Exxon and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Cornerstone Strategic vs. MFS Investment Grade | Cornerstone Strategic vs. Eaton Vance National | Cornerstone Strategic vs. Blackrock Muniyield Quality | Cornerstone Strategic vs. Munivest Fund |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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