Correlation Between Exxon and CSE Global
Can any of the company-specific risk be diversified away by investing in both Exxon and CSE Global 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 CSE Global 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 CSE Global Limited, you can compare the effects of market volatilities on Exxon and CSE Global 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 CSE Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and CSE Global.
Diversification Opportunities for Exxon and CSE Global
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and CSE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and CSE Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSE Global Limited 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 CSE Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSE Global Limited has no effect on the direction of Exxon i.e., Exxon and CSE Global go up and down completely randomly.
Pair Corralation between Exxon and CSE Global
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the CSE Global. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 4.05 times less risky than CSE Global. The stock trades about -0.1 of its potential returns per unit of risk. The CSE Global Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 30.00 in CSE Global Limited on October 26, 2024 and sell it today you would earn a total of 4.00 from holding CSE Global Limited or generate 13.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. CSE Global Limited
Performance |
| Timeline |
| Exxon Mobil Corp |
| CSE Global Limited |
Exxon and CSE Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and CSE Global
The main advantage of trading using opposite Exxon and CSE Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, CSE Global 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 CSE Global will offset losses from the drop in CSE Global's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| CSE Global vs. Appen Limited | CSE Global vs. Appen Limited | CSE Global vs. Deveron Corp | CSE Global vs. Capgemini SE ADR |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |