Correlation Between Exxon Mobil and Roper Technologies,

Can any of the company-specific risk be diversified away by investing in both Exxon Mobil and Roper Technologies, 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 Mobil and Roper Technologies, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exxon Mobil and Roper Technologies,, you can compare the effects of market volatilities on Exxon Mobil and Roper Technologies, 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 Mobil with a short position of Roper Technologies,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon Mobil and Roper Technologies,.

Diversification Opportunities for Exxon Mobil and Roper Technologies,

-0.65

Correlation Coefficient

Exxon Mobil  Roper Technologies,

Excellent diversification

The 3 months correlation between Exxon and Roper is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil and Roper Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roper Technologies, and Exxon Mobil 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 are associated (or correlated) with Roper Technologies,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roper Technologies, has no effect on the direction of Exxon Mobil i.e., Exxon Mobil and Roper Technologies, go up and down completely randomly.

Pair Corralation between Exxon Mobil and Roper Technologies,

Assuming the 90 days trading horizon Exxon Mobil is expected to under-perform the Roper Technologies,. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil is 1.28 times less risky than Roper Technologies,. The stock trades about -0.06 of its potential returns per unit of risk. The Roper Technologies, is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  29,630  in Roper Technologies, on October 8, 2024 and sell it today you would earn a total of  3,670  from holding Roper Technologies, or generate 12.39% return on investment over 90 days.

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

Exxon Mobil  vs.  Roper Technologies,

Exxon Mobil

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exxon Mobil has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Exxon Mobil is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Roper Technologies,

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Roper Technologies, are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Roper Technologies, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exxon Mobil and Roper Technologies,

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

The idea behind Exxon Mobil and Roper Technologies, 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.