Correlation Between Exxon and Exchange Listed
Can any of the company-specific risk be diversified away by investing in both Exxon and Exchange Listed 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 Exchange Listed 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 Exchange Listed Funds, you can compare the effects of market volatilities on Exxon and Exchange Listed 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 Exchange Listed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Exchange Listed.
Diversification Opportunities for Exxon and Exchange Listed
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Exxon and Exchange is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Exchange Listed Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Listed Funds 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 Exchange Listed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Listed Funds has no effect on the direction of Exxon i.e., Exxon and Exchange Listed go up and down completely randomly.
Pair Corralation between Exxon and Exchange Listed
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.67 times more return on investment than Exchange Listed. However, Exxon is 1.67 times more volatile than Exchange Listed Funds. It trades about 0.02 of its potential returns per unit of risk. Exchange Listed Funds is currently generating about 0.0 per unit of risk. If you would invest 10,919 in Exxon Mobil Corp on November 28, 2024 and sell it today you would earn a total of 54.00 from holding Exxon Mobil Corp or generate 0.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Exchange Listed Funds
Performance |
| Timeline |
| Exxon Mobil Corp |
| Exchange Listed Funds |
Exxon and Exchange Listed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Exchange Listed
The main advantage of trading using opposite Exxon and Exchange Listed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Exchange Listed 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 Exchange Listed will offset losses from the drop in Exchange Listed's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Exchange Listed vs. ETC 6 Meridian | Exchange Listed vs. 6 Meridian Mega | Exchange Listed vs. Tidal ETF Trust | Exchange Listed vs. 6 Meridian Low |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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