Correlation Between Exxon and DEERE
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By analyzing existing cross correlation between Exxon Mobil Corp and DEERE 81 percent, you can compare the effects of market volatilities on Exxon and DEERE 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 DEERE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and DEERE.
Diversification Opportunities for Exxon and DEERE
Very good diversification
The 3 months correlation between Exxon and DEERE is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and DEERE 81 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEERE 81 percent 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 DEERE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEERE 81 percent has no effect on the direction of Exxon i.e., Exxon and DEERE go up and down completely randomly.
Pair Corralation between Exxon and DEERE
Considering the 90-day investment horizon Exxon is expected to generate 1.83 times less return on investment than DEERE. But when comparing it to its historical volatility, Exxon Mobil Corp is 1.18 times less risky than DEERE. It trades about 0.04 of its potential returns per unit of risk. DEERE 81 percent is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 11,954 in DEERE 81 percent on August 31, 2024 and sell it today you would earn a total of 598.00 from holding DEERE 81 percent or generate 5.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.65% |
| Values | Daily Returns |
Exxon Mobil Corp vs. DEERE 81 percent
Performance |
| Timeline |
| Exxon Mobil Corp |
| DEERE 81 percent |
Exxon and DEERE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and DEERE
The main advantage of trading using opposite Exxon and DEERE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, DEERE 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 DEERE will offset losses from the drop in DEERE's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| DEERE vs. United Fire Group | DEERE vs. Sun Life Financial | DEERE vs. Constellation Brands Class | DEERE vs. Oatly Group AB |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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