Correlation Between Exxon and Grandeur Peak
Can any of the company-specific risk be diversified away by investing in both Exxon and Grandeur Peak 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 Grandeur Peak 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 Grandeur Peak Global, you can compare the effects of market volatilities on Exxon and Grandeur Peak 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 Grandeur Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Grandeur Peak.
Diversification Opportunities for Exxon and Grandeur Peak
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exxon and Grandeur is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Grandeur Peak Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandeur Peak Global 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 Grandeur Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandeur Peak Global has no effect on the direction of Exxon i.e., Exxon and Grandeur Peak go up and down completely randomly.
Pair Corralation between Exxon and Grandeur Peak
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.56 times more return on investment than Grandeur Peak. However, Exxon is 1.56 times more volatile than Grandeur Peak Global. It trades about 0.04 of its potential returns per unit of risk. Grandeur Peak Global is currently generating about 0.04 per unit of risk. If you would invest 9,829 in Exxon Mobil Corp on September 12, 2024 and sell it today you would earn a total of 1,438 from holding Exxon Mobil Corp or generate 14.63% 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. Grandeur Peak Global
Performance |
| Timeline |
| Exxon Mobil Corp |
| Grandeur Peak Global |
Exxon and Grandeur Peak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Grandeur Peak
The main advantage of trading using opposite Exxon and Grandeur Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Grandeur Peak 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 Grandeur Peak will offset losses from the drop in Grandeur Peak's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Grandeur Peak vs. Intel | Grandeur Peak vs. Exxon Mobil Corp | Grandeur Peak vs. ATT Inc | Grandeur Peak vs. International Business Machines |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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