Correlation Between Mexco Energy and Vivakor

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

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

Diversification Opportunities for Mexco Energy and Vivakor

0.4

Correlation Coefficient

Mexco Energy  Vivakor

Very weak diversification

The 3 months correlation between Mexco and Vivakor is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Mexco Energy and Vivakor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivakor and Mexco Energy 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 Mexco Energy are associated (or correlated) with Vivakor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivakor has no effect on the direction of Mexco Energy i.e., Mexco Energy and Vivakor go up and down completely randomly.

Pair Corralation between Mexco Energy and Vivakor

Considering the 90-day investment horizon Mexco Energy is expected to under-perform the Vivakor. But the stock apears to be less risky and, when comparing its historical volatility, Mexco Energy is 1.82 times less risky than Vivakor. The stock trades about -0.1 of its potential returns per unit of risk. The Vivakor is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  119.00  in Vivakor on December 28, 2024 and sell it today you would lose (29.00) from holding Vivakor or give up 24.37% of portfolio value over 90 days.

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

Mexco Energy  vs.  Vivakor

Mexco Energy

Risk-Adjusted Performance

Very Weak

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

Vivakor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivakor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Mexco Energy and Vivakor

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

The idea behind Mexco Energy and Vivakor 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.