Correlation Between Exxon and FEDEX
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By analyzing existing cross correlation between Exxon Mobil Corp and FEDEX P 405, you can compare the effects of market volatilities on Exxon and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and FEDEX.
Diversification Opportunities for Exxon and FEDEX
Very good diversification
The 3 months correlation between Exxon and FEDEX is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and FEDEX P 405 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 405 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 405 has no effect on the direction of Exxon i.e., Exxon and FEDEX go up and down completely randomly.
Pair Corralation between Exxon and FEDEX
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.54 times more return on investment than FEDEX. However, Exxon Mobil Corp is 1.84 times less risky than FEDEX. It trades about 0.08 of its potential returns per unit of risk. FEDEX P 405 is currently generating about -0.18 per unit of risk. If you would invest 11,583 in Exxon Mobil Corp on September 1, 2024 and sell it today you would earn a total of 213.00 from holding Exxon Mobil Corp or generate 1.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Exxon Mobil Corp vs. FEDEX P 405
Performance |
| Timeline |
| Exxon Mobil Corp |
| FEDEX P 405 |
Exxon and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and FEDEX
The main advantage of trading using opposite Exxon and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.The idea behind Exxon Mobil Corp and FEDEX P 405 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.| FEDEX vs. Chipotle Mexican Grill | FEDEX vs. Dennys Corp | FEDEX vs. Weibo Corp | FEDEX vs. The Cheesecake Factory |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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