Correlation Between Exxon and NewHold Investment
Can any of the company-specific risk be diversified away by investing in both Exxon and NewHold Investment 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 NewHold Investment 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 NewHold Investment Corp, you can compare the effects of market volatilities on Exxon and NewHold Investment 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 NewHold Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and NewHold Investment.
Diversification Opportunities for Exxon and NewHold Investment
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exxon and NewHold is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and NewHold Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NewHold Investment Corp 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 NewHold Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NewHold Investment Corp has no effect on the direction of Exxon i.e., Exxon and NewHold Investment go up and down completely randomly.
Pair Corralation between Exxon and NewHold Investment
If you would invest 10,281 in Exxon Mobil Corp on August 30, 2024 and sell it today you would earn a total of 1,485 from holding Exxon Mobil Corp or generate 14.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.25% |
| Values | Daily Returns |
Exxon Mobil Corp vs. NewHold Investment Corp
Performance |
| Timeline |
| Exxon Mobil Corp |
| NewHold Investment Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and NewHold Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and NewHold Investment
The main advantage of trading using opposite Exxon and NewHold Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, NewHold Investment 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 NewHold Investment will offset losses from the drop in NewHold Investment's long position.The idea behind Exxon Mobil Corp and NewHold Investment Corp 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.| NewHold Investment vs. Royalty Management Holding | NewHold Investment vs. PennantPark Floating Rate | NewHold Investment vs. Kaltura | NewHold Investment vs. Data3 Limited |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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