Correlation Between Exxon and Invesco CurrencyShares
Can any of the company-specific risk be diversified away by investing in both Exxon and Invesco CurrencyShares 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 Invesco CurrencyShares 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 Invesco CurrencyShares Swiss, you can compare the effects of market volatilities on Exxon and Invesco CurrencyShares 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 Invesco CurrencyShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Invesco CurrencyShares.
Diversification Opportunities for Exxon and Invesco CurrencyShares
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Invesco is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Invesco CurrencyShares Swiss in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco CurrencyShares 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 Invesco CurrencyShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco CurrencyShares has no effect on the direction of Exxon i.e., Exxon and Invesco CurrencyShares go up and down completely randomly.
Pair Corralation between Exxon and Invesco CurrencyShares
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 2.97 times more return on investment than Invesco CurrencyShares. However, Exxon is 2.97 times more volatile than Invesco CurrencyShares Swiss. It trades about 0.04 of its potential returns per unit of risk. Invesco CurrencyShares Swiss is currently generating about 0.03 per unit of risk. If you would invest 9,991 in Exxon Mobil Corp on August 24, 2024 and sell it today you would earn a total of 2,202 from holding Exxon Mobil Corp or generate 22.04% 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. Invesco CurrencyShares Swiss
Performance |
| Timeline |
| Exxon Mobil Corp |
| Invesco CurrencyShares |
Exxon and Invesco CurrencyShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Invesco CurrencyShares
The main advantage of trading using opposite Exxon and Invesco CurrencyShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Invesco CurrencyShares 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 Invesco CurrencyShares will offset losses from the drop in Invesco CurrencyShares' long position.| Exxon vs. Chevron Corp | Exxon vs. Small Cap Core | Exxon vs. Freedom Holding Corp | Exxon vs. Gfl Environmental Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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