Correlation Between Exxon and VERIZON
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By analyzing existing cross correlation between Exxon Mobil Corp and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on Exxon and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and VERIZON.
Diversification Opportunities for Exxon and VERIZON
Very good diversification
The 3 months correlation between Exxon and VERIZON is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS INC 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of Exxon i.e., Exxon and VERIZON go up and down completely randomly.
Pair Corralation between Exxon and VERIZON
Considering the 90-day investment horizon Exxon is expected to generate 2.83 times less return on investment than VERIZON. But when comparing it to its historical volatility, Exxon Mobil Corp is 1.68 times less risky than VERIZON. It trades about 0.09 of its potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,193 in VERIZON MUNICATIONS INC on August 24, 2024 and sell it today you would earn a total of 361.00 from holding VERIZON MUNICATIONS INC or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Exxon Mobil Corp vs. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| Exxon Mobil Corp |
| VERIZON MUNICATIONS INC |
Exxon and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and VERIZON
The main advantage of trading using opposite Exxon and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| VERIZON vs. PVH Corp | VERIZON vs. Lakeland Industries | VERIZON vs. Shake Shack | VERIZON vs. Biglari Holdings |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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