Correlation Between Exxon and Giga Metals
Can any of the company-specific risk be diversified away by investing in both Exxon and Giga Metals 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 Giga Metals 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 Giga Metals, you can compare the effects of market volatilities on Exxon and Giga Metals 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 Giga Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Giga Metals.
Diversification Opportunities for Exxon and Giga Metals
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Giga is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Giga Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Giga Metals 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 Giga Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Giga Metals has no effect on the direction of Exxon i.e., Exxon and Giga Metals go up and down completely randomly.
Pair Corralation between Exxon and Giga Metals
If you would invest 11,717 in Exxon Mobil Corp on August 29, 2024 and sell it today you would earn a total of 80.00 from holding Exxon Mobil Corp or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 1.56% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Giga Metals
Performance |
| Timeline |
| Exxon Mobil Corp |
| Giga Metals |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Giga Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Giga Metals
The main advantage of trading using opposite Exxon and Giga Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Giga Metals 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 Giga Metals will offset losses from the drop in Giga Metals' long position.The idea behind Exxon Mobil Corp and Giga Metals 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.| Giga Metals vs. Canada Nickel | Giga Metals vs. Giga Metals Corp | Giga Metals vs. Talon Metals Corp | Giga Metals vs. FPX Nickel Corp |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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