Correlation Between Exxon and FG Group
Can any of the company-specific risk be diversified away by investing in both Exxon and FG Group 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 FG Group 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 FG Group Holdings, you can compare the effects of market volatilities on Exxon and FG Group 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 FG Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and FG Group.
Diversification Opportunities for Exxon and FG Group
Excellent diversification
The 3 months correlation between Exxon and FGH is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and FG Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FG Group Holdings 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 FG Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FG Group Holdings has no effect on the direction of Exxon i.e., Exxon and FG Group go up and down completely randomly.
Pair Corralation between Exxon and FG Group
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.38 times more return on investment than FG Group. However, Exxon Mobil Corp is 2.63 times less risky than FG Group. It trades about 0.03 of its potential returns per unit of risk. FG Group Holdings is currently generating about -0.07 per unit of risk. If you would invest 10,029 in Exxon Mobil Corp on September 3, 2024 and sell it today you would earn a total of 1,767 from holding Exxon Mobil Corp or generate 17.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 30.91% |
| Values | Daily Returns |
Exxon Mobil Corp vs. FG Group Holdings
Performance |
| Timeline |
| Exxon Mobil Corp |
| FG Group Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and FG Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and FG Group
The main advantage of trading using opposite Exxon and FG Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, FG Group 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 FG Group will offset losses from the drop in FG Group's long position.The idea behind Exxon Mobil Corp and FG Group Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| FG Group vs. OneSpaWorld Holdings | FG Group vs. Games Workshop Group | FG Group vs. Johnson Outdoors | FG Group vs. American Outdoor Brands |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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