Correlation Between Exxon Mobil and TotalEnergies
Can any of the company-specific risk be diversified away by investing in both Exxon Mobil and TotalEnergies 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 TotalEnergies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exxon Mobil and TotalEnergies SE, you can compare the effects of market volatilities on Exxon Mobil and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon Mobil and TotalEnergies.
Diversification Opportunities for Exxon Mobil and TotalEnergies
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Exxon and TotalEnergies is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil and TotalEnergies SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TotalEnergies SE 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 TotalEnergies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TotalEnergies SE has no effect on the direction of Exxon Mobil i.e., Exxon Mobil and TotalEnergies go up and down completely randomly.
Pair Corralation between Exxon Mobil and TotalEnergies
Assuming the 90 days trading horizon Exxon Mobil is expected to generate 3.33 times less return on investment than TotalEnergies. In addition to that, Exxon Mobil is 1.32 times more volatile than TotalEnergies SE. It trades about 0.03 of its total potential returns per unit of risk. TotalEnergies SE is currently generating about 0.15 per unit of volatility. If you would invest 5,647 in TotalEnergies SE on December 1, 2024 and sell it today you would earn a total of 165.00 from holding TotalEnergies SE or generate 2.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil vs. TotalEnergies SE
Performance |
| Timeline |
| Exxon Mobil |
| TotalEnergies SE |
Exxon Mobil and TotalEnergies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon Mobil and TotalEnergies
The main advantage of trading using opposite Exxon Mobil and TotalEnergies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon Mobil position performs unexpectedly, TotalEnergies 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 TotalEnergies will offset losses from the drop in TotalEnergies' long position.| Exxon Mobil vs. Hemisphere Energy Corp | Exxon Mobil vs. SCANSOURCE | Exxon Mobil vs. MOLSON RS BEVERAGE | Exxon Mobil vs. Zoom Video Communications |
| TotalEnergies vs. Micron Technology | TotalEnergies vs. Hastings Technology Metals | TotalEnergies vs. INVITATION HOMES DL | TotalEnergies vs. Alfa Financial Software |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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