Correlation Between Exxon and KRAFT
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By analyzing existing cross correlation between Exxon Mobil Corp and KRAFT FOODS GROUP, you can compare the effects of market volatilities on Exxon and KRAFT 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 KRAFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and KRAFT.
Diversification Opportunities for Exxon and KRAFT
Excellent diversification
The 3 months correlation between Exxon and KRAFT is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and KRAFT FOODS GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRAFT FOODS GROUP 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 KRAFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRAFT FOODS GROUP has no effect on the direction of Exxon i.e., Exxon and KRAFT go up and down completely randomly.
Pair Corralation between Exxon and KRAFT
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.85 times more return on investment than KRAFT. However, Exxon is 1.85 times more volatile than KRAFT FOODS GROUP. It trades about 0.07 of its potential returns per unit of risk. KRAFT FOODS GROUP is currently generating about -0.02 per unit of risk. If you would invest 11,574 in Exxon Mobil Corp on August 31, 2024 and sell it today you would earn a total of 192.00 from holding Exxon Mobil Corp or generate 1.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Exxon Mobil Corp vs. KRAFT FOODS GROUP
Performance |
| Timeline |
| Exxon Mobil Corp |
| KRAFT FOODS GROUP |
Exxon and KRAFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and KRAFT
The main advantage of trading using opposite Exxon and KRAFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, KRAFT 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 KRAFT will offset losses from the drop in KRAFT's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| KRAFT vs. Westinghouse Air Brake | KRAFT vs. Corporacion America Airports | KRAFT vs. Alaska Air Group | KRAFT vs. Flex |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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