Correlation Between Exxon and GROUP
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By analyzing existing cross correlation between Exxon Mobil Corp and GROUP 1 AUTOMOTIVE, you can compare the effects of market volatilities on Exxon and GROUP 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 GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and GROUP.
Diversification Opportunities for Exxon and GROUP
Very good diversification
The 3 months correlation between Exxon and GROUP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and GROUP 1 AUTOMOTIVE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GROUP 1 AUTOMOTIVE 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 GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GROUP 1 AUTOMOTIVE has no effect on the direction of Exxon i.e., Exxon and GROUP go up and down completely randomly.
Pair Corralation between Exxon and GROUP
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.76 times more return on investment than GROUP. However, Exxon is 1.76 times more volatile than GROUP 1 AUTOMOTIVE. It trades about 0.01 of its potential returns per unit of risk. GROUP 1 AUTOMOTIVE is currently generating about -0.21 per unit of risk. If you would invest 11,793 in Exxon Mobil Corp on August 28, 2024 and sell it today you would earn a total of 4.00 from holding Exxon Mobil Corp or generate 0.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Exxon Mobil Corp vs. GROUP 1 AUTOMOTIVE
Performance |
| Timeline |
| Exxon Mobil Corp |
| GROUP 1 AUTOMOTIVE |
Exxon and GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and GROUP
The main advantage of trading using opposite Exxon and GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, GROUP 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 GROUP will offset losses from the drop in GROUP's long position.The idea behind Exxon Mobil Corp and GROUP 1 AUTOMOTIVE 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.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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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