Correlation Between KIN and Exxon

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

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

Diversification Opportunities for KIN and Exxon

-0.71

Correlation Coefficient

KIN  Exxon

Pay attention - limited upside

The 3 months correlation between KIN and Exxon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding KIN 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 KIN 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 KIN 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 KIN i.e., KIN and Exxon go up and down completely randomly.

Pair Corralation between KIN and Exxon

Assuming the 90 days trading horizon KIN is expected to under-perform the Exxon. In addition to that, KIN is 5.23 times more volatile than Exxon Mobil Corp. It trades about -0.04 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.06 per unit of volatility. If you would invest  11,313  in Exxon Mobil Corp on September 4, 2024 and sell it today you would earn a total of  472.00  from holding Exxon Mobil Corp or generate 4.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.92%
Values	Daily Returns

KIN  vs.  Exxon Mobil Corp

KIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for KIN shareholders.

Exxon Mobil Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exxon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with KIN and Exxon

The main advantage of trading using opposite KIN and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KIN 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 KIN 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.