Correlation Between Exxon and FT Vest
Can any of the company-specific risk be diversified away by investing in both Exxon and FT Vest 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 FT Vest 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 FT Vest NASDAQ 100, you can compare the effects of market volatilities on Exxon and FT Vest 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 FT Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and FT Vest.
Diversification Opportunities for Exxon and FT Vest
Modest diversification
The 3 months correlation between Exxon and QCAP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and FT Vest NASDAQ 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FT Vest NASDAQ 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 FT Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FT Vest NASDAQ has no effect on the direction of Exxon i.e., Exxon and FT Vest go up and down completely randomly.
Pair Corralation between Exxon and FT Vest
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 5.89 times more return on investment than FT Vest. However, Exxon is 5.89 times more volatile than FT Vest NASDAQ 100. It trades about 0.1 of its potential returns per unit of risk. FT Vest NASDAQ 100 is currently generating about 0.06 per unit of risk. If you would invest 10,482 in Exxon Mobil Corp on November 30, 2024 and sell it today you would earn a total of 533.00 from holding Exxon Mobil Corp or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. FT Vest NASDAQ 100
Performance |
| Timeline |
| Exxon Mobil Corp |
| FT Vest NASDAQ |
Exxon and FT Vest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and FT Vest
The main advantage of trading using opposite Exxon and FT Vest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, FT Vest 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 FT Vest will offset losses from the drop in FT Vest's long position.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
| FT Vest vs. FT Vest Equity | FT Vest vs. Northern Lights | FT Vest vs. Dimensional International High | FT Vest vs. First Trust Exchange Traded |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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