Correlation Between Exxon and Guggenheim Styleplus

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

Diversification Opportunities for Exxon and Guggenheim Styleplus

0.86

Correlation Coefficient

Exxon  Guggenheim Styleplus

Very poor diversification

The 3 months correlation between Exxon and Guggenheim is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Guggenheim Styleplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Styleplus 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 Guggenheim Styleplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Styleplus has no effect on the direction of Exxon i.e., Exxon and Guggenheim Styleplus go up and down completely randomly.

Pair Corralation between Exxon and Guggenheim Styleplus

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.05 times more return on investment than Guggenheim Styleplus. However, Exxon is 1.05 times more volatile than Guggenheim Styleplus . It trades about 0.39 of its potential returns per unit of risk. Guggenheim Styleplus is currently generating about -0.11 per unit of risk. If you would invest  11,230  in Exxon Mobil Corp on January 17, 2024 and sell it today you would earn a total of  738.00  from holding Exxon Mobil Corp or generate 6.57% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Exxon Mobil Corp  vs.  Guggenheim Styleplus

Exxon Mobil Corp

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 27 (%) 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.

Guggenheim Styleplus

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Guggenheim Styleplus are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Guggenheim Styleplus may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with Exxon and Guggenheim Styleplus

The main advantage of trading using opposite Exxon and Guggenheim Styleplus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Guggenheim Styleplus 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 Guggenheim Styleplus will offset losses from the drop in Guggenheim Styleplus' long position.

The idea behind Exxon Mobil Corp and Guggenheim Styleplus 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.