Correlation Between Exxon and BrandywineGLOBAL
Can any of the company-specific risk be diversified away by investing in both Exxon and BrandywineGLOBAL 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 BrandywineGLOBAL 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 BrandywineGLOBAL Dynamic, you can compare the effects of market volatilities on Exxon and BrandywineGLOBAL 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 BrandywineGLOBAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and BrandywineGLOBAL.
Diversification Opportunities for Exxon and BrandywineGLOBAL
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and BrandywineGLOBAL is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and BrandywineGLOBAL Dynamic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BrandywineGLOBAL D 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 BrandywineGLOBAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BrandywineGLOBAL D has no effect on the direction of Exxon i.e., Exxon and BrandywineGLOBAL go up and down completely randomly.
Pair Corralation between Exxon and BrandywineGLOBAL
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the BrandywineGLOBAL. In addition to that, Exxon is 2.05 times more volatile than BrandywineGLOBAL Dynamic. It trades about -0.09 of its total potential returns per unit of risk. BrandywineGLOBAL Dynamic is currently generating about -0.02 per unit of volatility. If you would invest 1,402 in BrandywineGLOBAL Dynamic on November 18, 2024 and sell it today you would lose (5.00) from holding BrandywineGLOBAL Dynamic or give up 0.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. BrandywineGLOBAL Dynamic
Performance |
| Timeline |
| Exxon Mobil Corp |
| BrandywineGLOBAL D |
Exxon and BrandywineGLOBAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and BrandywineGLOBAL
The main advantage of trading using opposite Exxon and BrandywineGLOBAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, BrandywineGLOBAL 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 BrandywineGLOBAL will offset losses from the drop in BrandywineGLOBAL's long position.| Exxon vs. TotalEnergies SE ADR | Exxon vs. Equinor ASA ADR | Exxon vs. Petrleo Brasileiro SA | Exxon vs. Ecopetrol SA ADR |
| BrandywineGLOBAL vs. Martin Currie Sustainable | BrandywineGLOBAL vs. Burney Factor Rotation | BrandywineGLOBAL vs. Invesco RAFI Strategic | BrandywineGLOBAL vs. First Trust Growth |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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