Correlation Between Exxon and Redwoods Acquisition
Can any of the company-specific risk be diversified away by investing in both Exxon and Redwoods Acquisition 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 Redwoods Acquisition 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 Redwoods Acquisition Corp, you can compare the effects of market volatilities on Exxon and Redwoods Acquisition 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 Redwoods Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Redwoods Acquisition.
Diversification Opportunities for Exxon and Redwoods Acquisition
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Redwoods is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Redwoods Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwoods Acquisition 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 Redwoods Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwoods Acquisition Corp has no effect on the direction of Exxon i.e., Exxon and Redwoods Acquisition go up and down completely randomly.
Pair Corralation between Exxon and Redwoods Acquisition
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.26 times more return on investment than Redwoods Acquisition. However, Exxon Mobil Corp is 3.83 times less risky than Redwoods Acquisition. It trades about 0.04 of its potential returns per unit of risk. Redwoods Acquisition Corp is currently generating about -0.04 per unit of risk. If you would invest 9,989 in Exxon Mobil Corp on August 26, 2024 and sell it today you would earn a total of 2,190 from holding Exxon Mobil Corp or generate 21.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 77.36% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Redwoods Acquisition Corp
Performance |
| Timeline |
| Exxon Mobil Corp |
| Redwoods Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Redwoods Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Redwoods Acquisition
The main advantage of trading using opposite Exxon and Redwoods Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Redwoods Acquisition 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 Redwoods Acquisition will offset losses from the drop in Redwoods Acquisition's long position.The idea behind Exxon Mobil Corp and Redwoods Acquisition 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.| Redwoods Acquisition vs. Qomolangma Acquisition Corp | Redwoods Acquisition vs. Patria Latin American | Redwoods Acquisition vs. Futuretech II Acquisition |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |