Correlation Between Zayo Group and Exxon

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Can any of the company-specific risk be diversified away by investing in both Zayo Group 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 Zayo Group and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zayo Group Holdings and Exxon Mobil Corp, you can compare the effects of market volatilities on Zayo Group 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 Zayo Group with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zayo Group and Exxon.

Diversification Opportunities for Zayo Group and Exxon

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Zayo and Exxon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zayo Group Holdings 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 Zayo Group 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 Zayo Group Holdings 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 Zayo Group i.e., Zayo Group and Exxon go up and down completely randomly.

Pair Corralation between Zayo Group and Exxon

If you would invest  8,087  in Exxon Mobil Corp on December 29, 2023 and sell it today you would earn a total of  3,410  from holding Exxon Mobil Corp or generate 42.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Zayo Group Holdings  vs.  Exxon Mobil Corp

 Performance 
       Timeline  
Zayo Group Holdings 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Zayo Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Zayo Group is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
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.

Zayo Group and Exxon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Zayo Group and Exxon

The main advantage of trading using opposite Zayo Group and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zayo Group 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.
The idea behind Zayo Group Holdings and Exxon Mobil 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.
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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