Correlation Between Exxon and Electronic Control
Can any of the company-specific risk be diversified away by investing in both Exxon and Electronic Control 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 Electronic Control 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 Electronic Control Security, you can compare the effects of market volatilities on Exxon and Electronic Control 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 Electronic Control. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Electronic Control.
Diversification Opportunities for Exxon and Electronic Control
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Electronic is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Electronic Control Security in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electronic Control 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 Electronic Control. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electronic Control has no effect on the direction of Exxon i.e., Exxon and Electronic Control go up and down completely randomly.
Pair Corralation between Exxon and Electronic Control
If you would invest 0.08 in Electronic Control Security on November 3, 2024 and sell it today you would earn a total of 0.00 from holding Electronic Control Security or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Electronic Control Security
Performance |
| Timeline |
| Exxon Mobil Corp |
| Electronic Control |
Exxon and Electronic Control Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Electronic Control
The main advantage of trading using opposite Exxon and Electronic Control positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Electronic Control 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 Electronic Control will offset losses from the drop in Electronic Control's long position.| Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. TotalEnergies SE ADR |
| Electronic Control vs. Guardforce AI Co | Electronic Control vs. Iveda Solutions | Electronic Control vs. Bridger Aerospace Group | Electronic Control vs. Supercom |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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