Correlation Between Exxon and Haier Smart
Can any of the company-specific risk be diversified away by investing in both Exxon and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on Exxon and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Haier Smart.
Diversification Opportunities for Exxon and Haier Smart
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and Haier is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of Exxon i.e., Exxon and Haier Smart go up and down completely randomly.
Pair Corralation between Exxon and Haier Smart
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.13 times more return on investment than Haier Smart. However, Exxon Mobil Corp is 7.49 times less risky than Haier Smart. It trades about 0.07 of its potential returns per unit of risk. Haier Smart Home is currently generating about -0.09 per unit of risk. If you would invest 11,574 in Exxon Mobil Corp on August 31, 2024 and sell it today you would earn a total of 192.00 from holding Exxon Mobil Corp or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Haier Smart Home
Performance |
| Timeline |
| Exxon Mobil Corp |
| Haier Smart Home |
Exxon and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Haier Smart
The main advantage of trading using opposite Exxon and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| Haier Smart vs. La Z Boy Incorporated | Haier Smart vs. MasterBrand | Haier Smart vs. MillerKnoll | Haier Smart vs. Flexsteel Industries |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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