Correlation Between Exxon and Greater Cannabis
Can any of the company-specific risk be diversified away by investing in both Exxon and Greater Cannabis 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 Greater Cannabis 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 Greater Cannabis, you can compare the effects of market volatilities on Exxon and Greater Cannabis 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 Greater Cannabis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Greater Cannabis.
Diversification Opportunities for Exxon and Greater Cannabis
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Greater is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Greater Cannabis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greater Cannabis 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 Greater Cannabis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greater Cannabis has no effect on the direction of Exxon i.e., Exxon and Greater Cannabis go up and down completely randomly.
Pair Corralation between Exxon and Greater Cannabis
Considering the 90-day investment horizon Exxon is expected to generate 47.04 times less return on investment than Greater Cannabis. But when comparing it to its historical volatility, Exxon Mobil Corp is 10.15 times less risky than Greater Cannabis. It trades about 0.01 of its potential returns per unit of risk. Greater Cannabis is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.07 in Greater Cannabis on November 19, 2024 and sell it today you would earn a total of 0.01 from holding Greater Cannabis or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Greater Cannabis
Performance |
| Timeline |
| Exxon Mobil Corp |
| Greater Cannabis |
Exxon and Greater Cannabis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Greater Cannabis
The main advantage of trading using opposite Exxon and Greater Cannabis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Greater Cannabis 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 Greater Cannabis will offset losses from the drop in Greater Cannabis' long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Greater Cannabis vs. Global Hemp Group | Greater Cannabis vs. Cannabis Suisse Corp | Greater Cannabis vs. Maple Leaf Green | Greater Cannabis vs. Mc Endvrs |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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