Correlation Between Exxon and Realty Income
Can any of the company-specific risk be diversified away by investing in both Exxon and Realty Income 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 Realty Income 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 Realty Income Corp, you can compare the effects of market volatilities on Exxon and Realty Income 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 Realty Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Realty Income.
Diversification Opportunities for Exxon and Realty Income
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and Realty is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Realty Income Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Realty me Corp 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 Realty Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Realty me Corp has no effect on the direction of Exxon i.e., Exxon and Realty Income go up and down completely randomly.
Pair Corralation between Exxon and Realty Income
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.61 times more return on investment than Realty Income. However, Exxon Mobil Corp is 1.65 times less risky than Realty Income. It trades about 0.28 of its potential returns per unit of risk. Realty Income Corp is currently generating about 0.0 per unit of risk. If you would invest 11,299 in Exxon Mobil Corp on January 20, 2024 and sell it today you would earn a total of 553.00 from holding Exxon Mobil Corp or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Realty Income Corp
Performance |
| Timeline |
| Exxon Mobil Corp |
| Realty me Corp |
Exxon and Realty Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Realty Income
The main advantage of trading using opposite Exxon and Realty Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Realty Income 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 Realty Income will offset losses from the drop in Realty Income's long position.The idea behind Exxon Mobil Corp and Realty Income Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
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.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |