Correlation Between Exxon and AMERICAN
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By analyzing existing cross correlation between Exxon Mobil Corp and AMERICAN HONDA FINANCE, you can compare the effects of market volatilities on Exxon and AMERICAN 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 AMERICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and AMERICAN.
Diversification Opportunities for Exxon and AMERICAN
Average diversification
The 3 months correlation between Exxon and AMERICAN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and AMERICAN HONDA FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMERICAN HONDA FINANCE 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 AMERICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMERICAN HONDA FINANCE has no effect on the direction of Exxon i.e., Exxon and AMERICAN go up and down completely randomly.
Pair Corralation between Exxon and AMERICAN
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.02 times more return on investment than AMERICAN. However, Exxon is 1.02 times more volatile than AMERICAN HONDA FINANCE. It trades about 0.06 of its potential returns per unit of risk. AMERICAN HONDA FINANCE is currently generating about -0.2 per unit of risk. If you would invest 10,860 in Exxon Mobil Corp on December 1, 2024 and sell it today you would earn a total of 155.00 from holding Exxon Mobil Corp or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exxon Mobil Corp vs. AMERICAN HONDA FINANCE
Performance |
| Timeline |
| Exxon Mobil Corp |
| AMERICAN HONDA FINANCE |
Exxon and AMERICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and AMERICAN
The main advantage of trading using opposite Exxon and AMERICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, AMERICAN 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 AMERICAN will offset losses from the drop in AMERICAN's long position.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
| AMERICAN vs. SEI Investments | AMERICAN vs. Space Communication | AMERICAN vs. Zhihu Inc ADR | AMERICAN vs. FS KKR Capital |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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