Correlation Between Exxon and Prologis
Can any of the company-specific risk be diversified away by investing in both Exxon and Prologis 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 Prologis 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 Prologis, you can compare the effects of market volatilities on Exxon and Prologis 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 Prologis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Prologis.
Diversification Opportunities for Exxon and Prologis
Very good diversification
The 3 months correlation between Exxon and Prologis is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Prologis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prologis 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 Prologis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prologis has no effect on the direction of Exxon i.e., Exxon and Prologis go up and down completely randomly.
Pair Corralation between Exxon and Prologis
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.65 times more return on investment than Prologis. However, Exxon Mobil Corp is 1.55 times less risky than Prologis. It trades about 0.05 of its potential returns per unit of risk. Prologis is currently generating about 0.03 per unit of risk. If you would invest 10,007 in Exxon Mobil Corp on August 26, 2024 and sell it today you would earn a total of 2,172 from holding Exxon Mobil Corp or generate 21.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.08% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Prologis
Performance |
| Timeline |
| Exxon Mobil Corp |
| Prologis |
Exxon and Prologis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Prologis
The main advantage of trading using opposite Exxon and Prologis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Prologis 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 Prologis will offset losses from the drop in Prologis' long position.| Exxon vs. Shell PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Cenovus Energy | Exxon vs. Petrleo Brasileiro SA |
| Prologis vs. LXP Industrial Trust | Prologis vs. First Industrial Realty | Prologis vs. Plymouth Industrial REIT | Prologis vs. Terreno Realty |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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