Correlation Between Exxon and Total Produce

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Can any of the company-specific risk be diversified away by investing in both Exxon and Total Produce 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 Total Produce 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 Total Produce Plc, you can compare the effects of market volatilities on Exxon and Total Produce 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 Total Produce. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Total Produce.

Diversification Opportunities for Exxon and Total Produce

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Exxon and Total is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Total Produce Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Produce Plc 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 Total Produce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Produce Plc has no effect on the direction of Exxon i.e., Exxon and Total Produce go up and down completely randomly.

Pair Corralation between Exxon and Total Produce

If you would invest  11,212  in Exxon Mobil Corp on December 29, 2023 and sell it today you would earn a total of  285.00  from holding Exxon Mobil Corp or generate 2.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Exxon Mobil Corp  vs.  Total Produce Plc

 Performance 
       Timeline  
Exxon Mobil Corp 

Risk-Adjusted Performance

17 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Exxon displayed solid returns over the last few months and may actually be approaching a breakup point.
Total Produce Plc 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Total Produce Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Total Produce is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Exxon and Total Produce Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Exxon and Total Produce

The main advantage of trading using opposite Exxon and Total Produce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Total Produce 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 Total Produce will offset losses from the drop in Total Produce's long position.
The idea behind Exxon Mobil Corp and Total Produce Plc 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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