Correlation Between Investor and Exxon
Can any of the company-specific risk be diversified away by investing in both Investor and Exxon 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 Investor and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investor AB and Exxon Mobil Corp, you can compare the effects of market volatilities on Investor and Exxon 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 Investor with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investor and Exxon.
Diversification Opportunities for Investor and Exxon
Pay attention - limited upside
The 3 months correlation between Investor and Exxon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investor AB and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp and Investor 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 Investor AB are associated (or correlated) with Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Investor i.e., Investor and Exxon go up and down completely randomly.
Pair Corralation between Investor and Exxon
If you would invest 10,205 in Exxon Mobil Corp on January 26, 2024 and sell it today you would earn a total of 1,900 from holding Exxon Mobil Corp or generate 18.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Investor AB vs. Exxon Mobil Corp
Performance |
| Timeline |
| Investor AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Exxon Mobil Corp |
Investor and Exxon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investor and Exxon
The main advantage of trading using opposite Investor and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investor position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.| Investor vs. Boston Properties | Investor vs. MI Homes | Investor vs. SL Green Realty | Investor vs. Live Ventures |
| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
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 CEOs Directory module to screen CEOs from public companies around the world.
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