Correlation Between Exxon and Beyond Minerals

Can any of the company-specific risk be diversified away by investing in both Exxon and Beyond Minerals 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 Beyond Minerals 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 Beyond Minerals, you can compare the effects of market volatilities on Exxon and Beyond Minerals 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 Beyond Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Beyond Minerals.

Diversification Opportunities for Exxon and Beyond Minerals

0.48

Correlation Coefficient

Exxon  Beyond Minerals

Very weak diversification

The 3 months correlation between Exxon and Beyond is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Beyond Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beyond Minerals 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 Beyond Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beyond Minerals has no effect on the direction of Exxon i.e., Exxon and Beyond Minerals go up and down completely randomly.

Pair Corralation between Exxon and Beyond Minerals

Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Beyond Minerals. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 9.41 times less risky than Beyond Minerals. The stock trades about -0.08 of its potential returns per unit of risk. The Beyond Minerals is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  2.77  in Beyond Minerals on November 29, 2024 and sell it today you would lose (0.77) from holding Beyond Minerals or give up 27.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.72%
Values	Daily Returns

Exxon Mobil Corp  vs.  Beyond Minerals

Exxon Mobil Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Beyond Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Beyond Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile primary indicators, Beyond Minerals may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Exxon and Beyond Minerals

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

The idea behind Exxon Mobil Corp and Beyond Minerals 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.