Correlation Between Exxon Mobil and PetroChina Company
Can any of the company-specific risk be diversified away by investing in both Exxon Mobil and PetroChina Company 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 Mobil and PetroChina Company into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil and PetroChina Company Limited, you can compare the effects of market volatilities on Exxon Mobil and PetroChina Company 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 Mobil with a short position of PetroChina Company. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon Mobil and PetroChina Company.
Diversification Opportunities for Exxon Mobil and PetroChina Company
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exxon and PetroChina is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil and PetroChina Company Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PetroChina Limited and Exxon Mobil 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 are associated (or correlated) with PetroChina Company. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PetroChina Limited has no effect on the direction of Exxon Mobil i.e., Exxon Mobil and PetroChina Company go up and down completely randomly.
Pair Corralation between Exxon Mobil and PetroChina Company
Assuming the 90 days trading horizon Exxon Mobil is expected to generate 10.53 times less return on investment than PetroChina Company. But when comparing it to its historical volatility, Exxon Mobil is 2.86 times less risky than PetroChina Company. It trades about 0.03 of its potential returns per unit of risk. PetroChina Company Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 8.92 in PetroChina Company Limited on September 3, 2024 and sell it today you would earn a total of 58.08 from holding PetroChina Company Limited or generate 651.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil vs. PetroChina Company Limited
Performance |
| Timeline |
| Exxon Mobil |
| PetroChina Limited |
Exxon Mobil and PetroChina Company Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon Mobil and PetroChina Company
The main advantage of trading using opposite Exxon Mobil and PetroChina Company positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon Mobil position performs unexpectedly, PetroChina Company 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 PetroChina Company will offset losses from the drop in PetroChina Company's long position.| Exxon Mobil vs. VIAPLAY GROUP AB | Exxon Mobil vs. Spirent Communications plc | Exxon Mobil vs. TRAVEL LEISURE DL 01 | Exxon Mobil vs. Consolidated Communications Holdings |
| PetroChina Company vs. Benchmark Electronics | PetroChina Company vs. Penn National Gaming | PetroChina Company vs. LPKF Laser Electronics | PetroChina Company vs. GAMESTOP |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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