Correlation Between Exxon and APPLE
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By analyzing existing cross correlation between Exxon Mobil Corp and APPLE INC, you can compare the effects of market volatilities on Exxon and APPLE 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 APPLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and APPLE.
Diversification Opportunities for Exxon and APPLE
Excellent diversification
The 3 months correlation between Exxon and APPLE is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and APPLE INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APPLE 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 APPLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APPLE INC has no effect on the direction of Exxon i.e., Exxon and APPLE go up and down completely randomly.
Pair Corralation between Exxon and APPLE
Considering the 90-day investment horizon Exxon is expected to generate 1.1 times less return on investment than APPLE. But when comparing it to its historical volatility, Exxon Mobil Corp is 1.24 times less risky than APPLE. It trades about 0.03 of its potential returns per unit of risk. APPLE INC is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,884 in APPLE INC on August 30, 2024 and sell it today you would earn a total of 79.00 from holding APPLE INC or generate 1.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exxon Mobil Corp vs. APPLE INC
Performance |
| Timeline |
| Exxon Mobil Corp |
| APPLE INC |
Exxon and APPLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and APPLE
The main advantage of trading using opposite Exxon and APPLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, APPLE 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 APPLE will offset losses from the drop in APPLE's long position.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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