Correlation Between Exxon and Gold Reserve
Can any of the company-specific risk be diversified away by investing in both Exxon and Gold Reserve 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 Gold Reserve 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 Gold Reserve, you can compare the effects of market volatilities on Exxon and Gold Reserve 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 Gold Reserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Gold Reserve.
Diversification Opportunities for Exxon and Gold Reserve
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Gold is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Gold Reserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Reserve 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 Gold Reserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Reserve has no effect on the direction of Exxon i.e., Exxon and Gold Reserve go up and down completely randomly.
Pair Corralation between Exxon and Gold Reserve
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.13 times more return on investment than Gold Reserve. However, Exxon Mobil Corp is 7.86 times less risky than Gold Reserve. It trades about 0.0 of its potential returns per unit of risk. Gold Reserve is currently generating about -0.19 per unit of risk. If you would invest 11,793 in Exxon Mobil Corp on August 29, 2024 and sell it today you would lose (27.00) from holding Exxon Mobil Corp or give up 0.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Gold Reserve
Performance |
| Timeline |
| Exxon Mobil Corp |
| Gold Reserve |
Exxon and Gold Reserve Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Gold Reserve
The main advantage of trading using opposite Exxon and Gold Reserve positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Gold Reserve 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 Gold Reserve will offset losses from the drop in Gold Reserve's long position.The idea behind Exxon Mobil Corp and Gold Reserve 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.| Gold Reserve vs. Monarch Mining | Gold Reserve vs. Lundin Gold | Gold Reserve vs. Liberty Gold Corp | Gold Reserve vs. Minera Alamos |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |