Correlation Between Exxon and ALTRIA
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By analyzing existing cross correlation between Exxon Mobil Corp and ALTRIA GROUP INC, you can compare the effects of market volatilities on Exxon and ALTRIA 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 ALTRIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ALTRIA.
Diversification Opportunities for Exxon and ALTRIA
Excellent diversification
The 3 months correlation between Exxon and ALTRIA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ALTRIA GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALTRIA GROUP INC 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 ALTRIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALTRIA GROUP INC has no effect on the direction of Exxon i.e., Exxon and ALTRIA go up and down completely randomly.
Pair Corralation between Exxon and ALTRIA
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.75 times more return on investment than ALTRIA. However, Exxon Mobil Corp is 1.33 times less risky than ALTRIA. It trades about 0.07 of its potential returns per unit of risk. ALTRIA GROUP INC is currently generating about -0.01 per unit of risk. If you would invest 9,713 in Exxon Mobil Corp on August 31, 2024 and sell it today you would earn a total of 2,083 from holding Exxon Mobil Corp or generate 21.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.8% |
| Values | Daily Returns |
Exxon Mobil Corp vs. ALTRIA GROUP INC
Performance |
| Timeline |
| Exxon Mobil Corp |
| ALTRIA GROUP INC |
Exxon and ALTRIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ALTRIA
The main advantage of trading using opposite Exxon and ALTRIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, ALTRIA 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 ALTRIA will offset losses from the drop in ALTRIA's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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