Correlation Between Exxon and Via Optronics
Can any of the company-specific risk be diversified away by investing in both Exxon and Via Optronics at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Exxon and Via Optronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil Corp and Via Optronics Ag, you can compare the effects of market volatilities on Exxon and Via Optronics 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 Via Optronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Via Optronics.
Diversification Opportunities for Exxon and Via Optronics
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Exxon and Via is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Via Optronics Ag in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Via Optronics Ag 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 Via Optronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Via Optronics Ag has no effect on the direction of Exxon i.e., Exxon and Via Optronics go up and down completely randomly.
Pair Corralation between Exxon and Via Optronics
Considering the 90-day investment horizon Exxon is expected to generate 12.18 times less return on investment than Via Optronics. But when comparing it to its historical volatility, Exxon Mobil Corp is 16.85 times less risky than Via Optronics. It trades about 0.04 of its potential returns per unit of risk. Via Optronics Ag is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 210.00 in Via Optronics Ag on September 12, 2024 and sell it today you would lose (195.00) from holding Via Optronics Ag or give up 92.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 67.33% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Via Optronics Ag
Performance |
| Timeline |
| Exxon Mobil Corp |
| Via Optronics Ag |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Via Optronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Via Optronics
The main advantage of trading using opposite Exxon and Via Optronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Via Optronics 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 Via Optronics will offset losses from the drop in Via Optronics' long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Via Optronics vs. Benchmark Electronics | Via Optronics vs. Bel Fuse A | Via Optronics vs. Methode Electronics | Via Optronics vs. Bel Fuse B |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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