Correlation Between Exxon and Regulus Resources
Can any of the company-specific risk be diversified away by investing in both Exxon and Regulus Resources 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 Regulus Resources 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 Regulus Resources, you can compare the effects of market volatilities on Exxon and Regulus Resources 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 Regulus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Regulus Resources.
Diversification Opportunities for Exxon and Regulus Resources
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Regulus is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources 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 Regulus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Resources has no effect on the direction of Exxon i.e., Exxon and Regulus Resources go up and down completely randomly.
Pair Corralation between Exxon and Regulus Resources
Considering the 90-day investment horizon Exxon is expected to generate 4.55 times less return on investment than Regulus Resources. But when comparing it to its historical volatility, Exxon Mobil Corp is 3.02 times less risky than Regulus Resources. It trades about 0.08 of its potential returns per unit of risk. Regulus Resources is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 68.00 in Regulus Resources on August 29, 2024 and sell it today you would earn a total of 75.00 from holding Regulus Resources or generate 110.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Regulus Resources
Performance |
| Timeline |
| Exxon Mobil Corp |
| Regulus Resources |
Exxon and Regulus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Regulus Resources
The main advantage of trading using opposite Exxon and Regulus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Regulus Resources 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 Regulus Resources will offset losses from the drop in Regulus Resources' long position.The idea behind Exxon Mobil Corp and Regulus Resources 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.| Regulus Resources vs. Silver Hammer Mining | Regulus Resources vs. Reyna Silver Corp | Regulus Resources vs. Guanajuato Silver | Regulus Resources vs. Silver One Resources |
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.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |