Correlation Between Exxon and Zoomd Technologies

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Can any of the company-specific risk be diversified away by investing in both Exxon and Zoomd 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 and Zoomd Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXXON MOBIL CDR and Zoomd Technologies, you can compare the effects of market volatilities on Exxon and Zoomd 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 with a short position of Zoomd Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Zoomd Technologies.

Diversification Opportunities for Exxon and Zoomd Technologies

-0.7
  Correlation Coefficient

Excellent diversification

The 3 months correlation between Exxon and Zoomd is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding EXXON MOBIL CDR and Zoomd Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoomd Technologies 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 CDR are associated (or correlated) with Zoomd Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoomd Technologies has no effect on the direction of Exxon i.e., Exxon and Zoomd Technologies go up and down completely randomly.

Pair Corralation between Exxon and Zoomd Technologies

Assuming the 90 days trading horizon EXXON MOBIL CDR is expected to under-perform the Zoomd Technologies. But the stock apears to be less risky and, when comparing its historical volatility, EXXON MOBIL CDR is 4.96 times less risky than Zoomd Technologies. The stock trades about -0.09 of its potential returns per unit of risk. The Zoomd Technologies is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  43.00  in Zoomd Technologies on September 25, 2024 and sell it today you would earn a total of  37.00  from holding Zoomd Technologies or generate 86.05% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

EXXON MOBIL CDR  vs.  Zoomd Technologies

 Performance 
       Timeline  
EXXON MOBIL CDR 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days EXXON MOBIL CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.
Zoomd Technologies 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Zoomd Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating primary indicators, Zoomd Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Exxon and Zoomd Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Exxon and Zoomd Technologies

The main advantage of trading using opposite Exxon and Zoomd Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Zoomd 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 Zoomd Technologies will offset losses from the drop in Zoomd Technologies' long position.
The idea behind EXXON MOBIL CDR and Zoomd 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.
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.

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