Correlation Between Exxon and NORTHROP
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By analyzing existing cross correlation between Exxon Mobil Corp and NORTHROP GRUMMAN P, you can compare the effects of market volatilities on Exxon and NORTHROP 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 NORTHROP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and NORTHROP.
Diversification Opportunities for Exxon and NORTHROP
Very good diversification
The 3 months correlation between Exxon and NORTHROP is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and NORTHROP GRUMMAN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHROP GRUMMAN P 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 NORTHROP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHROP GRUMMAN P has no effect on the direction of Exxon i.e., Exxon and NORTHROP go up and down completely randomly.
Pair Corralation between Exxon and NORTHROP
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 2.75 times more return on investment than NORTHROP. However, Exxon is 2.75 times more volatile than NORTHROP GRUMMAN P. It trades about 0.03 of its potential returns per unit of risk. NORTHROP GRUMMAN P is currently generating about -0.01 per unit of risk. If you would invest 10,143 in Exxon Mobil Corp on August 31, 2024 and sell it today you would earn a total of 1,653 from holding Exxon Mobil Corp or generate 16.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.58% |
| Values | Daily Returns |
Exxon Mobil Corp vs. NORTHROP GRUMMAN P
Performance |
| Timeline |
| Exxon Mobil Corp |
| NORTHROP GRUMMAN P |
Exxon and NORTHROP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and NORTHROP
The main advantage of trading using opposite Exxon and NORTHROP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, NORTHROP 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 NORTHROP will offset losses from the drop in NORTHROP's long position.| Exxon vs. RLJ Lodging Trust | Exxon vs. Aquagold International | Exxon vs. Stepstone Group | Exxon vs. Morningstar Unconstrained Allocation |
| NORTHROP vs. Dream Finders Homes | NORTHROP vs. Cumberland Pharmaceuticals | NORTHROP vs. Jacobs Solutions | NORTHROP vs. The Joint 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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