Correlation Between Exxon and INTERNATIONAL
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By analyzing existing cross correlation between Exxon Mobil Corp and INTERNATIONAL BUSINESS MACHS, you can compare the effects of market volatilities on Exxon and INTERNATIONAL 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 INTERNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and INTERNATIONAL.
Diversification Opportunities for Exxon and INTERNATIONAL
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and INTERNATIONAL is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and INTERNATIONAL BUSINESS MACHS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERNATIONAL BUSINESS 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 INTERNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERNATIONAL BUSINESS has no effect on the direction of Exxon i.e., Exxon and INTERNATIONAL go up and down completely randomly.
Pair Corralation between Exxon and INTERNATIONAL
Considering the 90-day investment horizon Exxon is expected to generate 5.98 times less return on investment than INTERNATIONAL. In addition to that, Exxon is 2.33 times more volatile than INTERNATIONAL BUSINESS MACHS. It trades about 0.01 of its total potential returns per unit of risk. INTERNATIONAL BUSINESS MACHS is currently generating about 0.1 per unit of volatility. If you would invest 10,440 in INTERNATIONAL BUSINESS MACHS on August 29, 2024 and sell it today you would earn a total of 117.00 from holding INTERNATIONAL BUSINESS MACHS or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. INTERNATIONAL BUSINESS MACHS
Performance |
| Timeline |
| Exxon Mobil Corp |
| INTERNATIONAL BUSINESS |
Exxon and INTERNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and INTERNATIONAL
The main advantage of trading using opposite Exxon and INTERNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, INTERNATIONAL 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 INTERNATIONAL will offset losses from the drop in INTERNATIONAL's long position.The idea behind Exxon Mobil Corp and INTERNATIONAL BUSINESS MACHS 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.| INTERNATIONAL vs. NetSol Technologies | INTERNATIONAL vs. ScanSource | INTERNATIONAL vs. Bel Fuse A | INTERNATIONAL vs. Arrow Electronics |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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