Correlation Between Exxon and ENTERPRISE
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By analyzing existing cross correlation between Exxon Mobil Corp and ENTERPRISE PRODS OPER, you can compare the effects of market volatilities on Exxon and ENTERPRISE 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 ENTERPRISE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ENTERPRISE.
Diversification Opportunities for Exxon and ENTERPRISE
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and ENTERPRISE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ENTERPRISE PRODS OPER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENTERPRISE PRODS OPER 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 ENTERPRISE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENTERPRISE PRODS OPER has no effect on the direction of Exxon i.e., Exxon and ENTERPRISE go up and down completely randomly.
Pair Corralation between Exxon and ENTERPRISE
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.62 times more return on investment than ENTERPRISE. However, Exxon is 1.62 times more volatile than ENTERPRISE PRODS OPER. It trades about 0.04 of its potential returns per unit of risk. ENTERPRISE PRODS OPER is currently generating about 0.03 per unit of risk. If you would invest 11,261 in Exxon Mobil Corp on September 1, 2024 and sell it today you would earn a total of 535.00 from holding Exxon Mobil Corp or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 92.06% |
| Values | Daily Returns |
Exxon Mobil Corp vs. ENTERPRISE PRODS OPER
Performance |
| Timeline |
| Exxon Mobil Corp |
| ENTERPRISE PRODS OPER |
Exxon and ENTERPRISE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ENTERPRISE
The main advantage of trading using opposite Exxon and ENTERPRISE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, ENTERPRISE 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 ENTERPRISE will offset losses from the drop in ENTERPRISE's long position.The idea behind Exxon Mobil Corp and ENTERPRISE PRODS OPER pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ENTERPRISE vs. AEP TEX INC | ENTERPRISE vs. US BANK NATIONAL | ENTERPRISE vs. Bank of America | ENTERPRISE vs. GE Aerospace |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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