Correlation Between Exxon and Lucy Scientific
Can any of the company-specific risk be diversified away by investing in both Exxon and Lucy Scientific 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 Lucy Scientific 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 Lucy Scientific Discovery, you can compare the effects of market volatilities on Exxon and Lucy Scientific 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 Lucy Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Lucy Scientific.
Diversification Opportunities for Exxon and Lucy Scientific
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxon and Lucy is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Lucy Scientific Discovery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lucy Scientific Discovery 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 Lucy Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lucy Scientific Discovery has no effect on the direction of Exxon i.e., Exxon and Lucy Scientific go up and down completely randomly.
Pair Corralation between Exxon and Lucy Scientific
Considering the 90-day investment horizon Exxon is expected to generate 228.23 times less return on investment than Lucy Scientific. But when comparing it to its historical volatility, Exxon Mobil Corp is 82.32 times less risky than Lucy Scientific. It trades about 0.03 of its potential returns per unit of risk. Lucy Scientific Discovery is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,140 in Lucy Scientific Discovery on August 31, 2024 and sell it today you would lose (1,138) from holding Lucy Scientific Discovery or give up 99.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 83.16% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Lucy Scientific Discovery
Performance |
| Timeline |
| Exxon Mobil Corp |
| Lucy Scientific Discovery |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Lucy Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Lucy Scientific
The main advantage of trading using opposite Exxon and Lucy Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Lucy Scientific 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 Lucy Scientific will offset losses from the drop in Lucy Scientific's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| Lucy Scientific vs. Shuttle Pharmaceuticals | Lucy Scientific vs. Lifecore Biomedical | Lucy Scientific vs. Journey Medical Corp | Lucy Scientific vs. Akanda 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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