Correlation Between Exxon and Real Brands
Can any of the company-specific risk be diversified away by investing in both Exxon and Real Brands 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 Real Brands 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 Real Brands, you can compare the effects of market volatilities on Exxon and Real Brands 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 Real Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Real Brands.
Diversification Opportunities for Exxon and Real Brands
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Real is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Real Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Brands 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 Real Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Brands has no effect on the direction of Exxon i.e., Exxon and Real Brands go up and down completely randomly.
Pair Corralation between Exxon and Real Brands
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.04 times more return on investment than Real Brands. However, Exxon Mobil Corp is 26.48 times less risky than Real Brands. It trades about 0.04 of its potential returns per unit of risk. Real Brands is currently generating about -0.03 per unit of risk. If you would invest 11,626 in Exxon Mobil Corp on August 29, 2024 and sell it today you would earn a total of 206.50 from holding Exxon Mobil Corp or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Real Brands
Performance |
| Timeline |
| Exxon Mobil Corp |
| Real Brands |
Exxon and Real Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Real Brands
The main advantage of trading using opposite Exxon and Real Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Real Brands 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 Real Brands will offset losses from the drop in Real Brands' long position.The idea behind Exxon Mobil Corp and Real Brands 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.| Real Brands vs. American Premium Water | Real Brands vs. Puration | Real Brands vs. Kona Gold Solutions | Real Brands vs. Leafbuyer Technologies |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |