Correlation Between Exxon and AiXin Life
Can any of the company-specific risk be diversified away by investing in both Exxon and AiXin Life 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 AiXin Life 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 AiXin Life International, you can compare the effects of market volatilities on Exxon and AiXin Life 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 AiXin Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and AiXin Life.
Diversification Opportunities for Exxon and AiXin Life
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Exxon and AiXin is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and AiXin Life International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiXin Life International 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 AiXin Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiXin Life International has no effect on the direction of Exxon i.e., Exxon and AiXin Life go up and down completely randomly.
Pair Corralation between Exxon and AiXin Life
Considering the 90-day investment horizon Exxon is expected to generate 76.73 times less return on investment than AiXin Life. But when comparing it to its historical volatility, Exxon Mobil Corp is 92.21 times less risky than AiXin Life. It trades about 0.14 of its potential returns per unit of risk. AiXin Life International is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.80 in AiXin Life International on December 27, 2024 and sell it today you would earn a total of 2.40 from holding AiXin Life International or generate 133.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Exxon Mobil Corp vs. AiXin Life International
Performance |
Timeline |
Exxon Mobil Corp |
AiXin Life International |
Exxon and AiXin Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exxon and AiXin Life
The main advantage of trading using opposite Exxon and AiXin Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, AiXin Life 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 AiXin Life will offset losses from the drop in AiXin Life's long position.The idea behind Exxon Mobil Corp and AiXin Life International 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.AiXin Life vs. Bunzl plc | AiXin Life vs. Wanderport Corp | AiXin Life vs. Innovative Food Hldg | AiXin Life vs. Calavo Growers |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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