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
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and INTERNATIONAL is -0.35. 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 Mobil Corp is expected to generate 2.0 times more return on investment than INTERNATIONAL. However, Exxon is 2.0 times more volatile than INTERNATIONAL BUSINESS MACHS. It trades about 0.11 of its potential returns per unit of risk. INTERNATIONAL BUSINESS MACHS is currently generating about 0.1 per unit of risk. If you would invest 11,862 in Exxon Mobil Corp on August 25, 2024 and sell it today you would earn a total of 317.00 from holding Exxon Mobil Corp or generate 2.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 86.36% |
| 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.| Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
| INTERNATIONAL vs. The Coca Cola | INTERNATIONAL vs. JPMorgan Chase Co | INTERNATIONAL vs. Dupont De Nemours | INTERNATIONAL vs. Alcoa Corp |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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