Correlation Between Exxon and Listed Funds
Can any of the company-specific risk be diversified away by investing in both Exxon and Listed Funds 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 Listed Funds 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 Listed Funds Trust, you can compare the effects of market volatilities on Exxon and Listed Funds 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 Listed Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Listed Funds.
Diversification Opportunities for Exxon and Listed Funds
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exxon and Listed is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Listed Funds Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Listed Funds Trust 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 Listed Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Listed Funds Trust has no effect on the direction of Exxon i.e., Exxon and Listed Funds go up and down completely randomly.
Pair Corralation between Exxon and Listed Funds
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Listed Funds. In addition to that, Exxon is 2.57 times more volatile than Listed Funds Trust. It trades about -0.26 of its total potential returns per unit of risk. Listed Funds Trust is currently generating about 0.14 per unit of volatility. If you would invest 3,633 in Listed Funds Trust on September 12, 2024 and sell it today you would earn a total of 43.00 from holding Listed Funds Trust or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Listed Funds Trust
Performance |
| Timeline |
| Exxon Mobil Corp |
| Listed Funds Trust |
Exxon and Listed Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Listed Funds
The main advantage of trading using opposite Exxon and Listed Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Listed Funds 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 Listed Funds will offset losses from the drop in Listed Funds' long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Listed Funds vs. Innovator ETFs Trust | Listed Funds vs. First Trust Cboe | Listed Funds vs. FT Cboe Vest | Listed Funds vs. Innovator SP 500 |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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