Correlation Between Exxon and Altisource Asset
Can any of the company-specific risk be diversified away by investing in both Exxon and Altisource Asset 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 Altisource Asset 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 Altisource Asset Management, you can compare the effects of market volatilities on Exxon and Altisource Asset 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 Altisource Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Altisource Asset.
Diversification Opportunities for Exxon and Altisource Asset
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Exxon and Altisource is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Altisource Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altisource Asset Man 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 Altisource Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altisource Asset Man has no effect on the direction of Exxon i.e., Exxon and Altisource Asset go up and down completely randomly.
Pair Corralation between Exxon and Altisource Asset
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.14 times more return on investment than Altisource Asset. However, Exxon Mobil Corp is 7.16 times less risky than Altisource Asset. It trades about 0.07 of its potential returns per unit of risk. Altisource Asset Management is currently generating about -0.07 per unit of risk. If you would invest 10,276 in Exxon Mobil Corp on January 18, 2024 and sell it today you would earn a total of 1,587 from holding Exxon Mobil Corp or generate 15.44% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Exxon Mobil Corp vs. Altisource Asset Management
Performance |
Timeline |
Exxon Mobil Corp |
Altisource Asset Man |
Exxon and Altisource Asset Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exxon and Altisource Asset
The main advantage of trading using opposite Exxon and Altisource Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Altisource Asset 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 Altisource Asset will offset losses from the drop in Altisource Asset's long position.The idea behind Exxon Mobil Corp and Altisource Asset Management 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.Altisource Asset vs. Anywhere Real Estate | Altisource Asset vs. Opendoor Technologies | Altisource Asset vs. Re Max Holding | Altisource Asset vs. Redfin Corp |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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