Correlation Between Exxon and GENERAL
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By analyzing existing cross correlation between Exxon Mobil Corp and GENERAL MLS INC, you can compare the effects of market volatilities on Exxon and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and GENERAL.
Diversification Opportunities for Exxon and GENERAL
Weak diversification
The 3 months correlation between Exxon and GENERAL is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and GENERAL MLS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL MLS 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL MLS INC has no effect on the direction of Exxon i.e., Exxon and GENERAL go up and down completely randomly.
Pair Corralation between Exxon and GENERAL
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 2.61 times more return on investment than GENERAL. However, Exxon is 2.61 times more volatile than GENERAL MLS INC. It trades about 0.04 of its potential returns per unit of risk. GENERAL MLS INC is currently generating about -0.13 per unit of risk. If you would invest 11,453 in Exxon Mobil Corp on September 3, 2024 and sell it today you would earn a total of 343.00 from holding Exxon Mobil Corp or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.06% |
| Values | Daily Returns |
Exxon Mobil Corp vs. GENERAL MLS INC
Performance |
| Timeline |
| Exxon Mobil Corp |
| GENERAL MLS INC |
Exxon and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and GENERAL
The main advantage of trading using opposite Exxon and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.The idea behind Exxon Mobil Corp and GENERAL MLS INC 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.| GENERAL vs. Eastman Chemical | GENERAL vs. CF Industries Holdings | GENERAL vs. Luxfer Holdings PLC | GENERAL vs. Videolocity International |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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