Correlation Between Exxon and Elevation Series

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

Diversification Opportunities for Exxon and Elevation Series

0.26

Correlation Coefficient

Exxon  Elevation Series

Modest diversification

The 3 months correlation between Exxon and Elevation is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Elevation Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elevation Series Trust 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 Elevation Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elevation Series Trust has no effect on the direction of Exxon i.e., Exxon and Elevation Series go up and down completely randomly.

Pair Corralation between Exxon and Elevation Series

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.02 times more return on investment than Elevation Series. However, Exxon is 1.02 times more volatile than Elevation Series Trust. It trades about 0.1 of its potential returns per unit of risk. Elevation Series Trust is currently generating about 0.03 per unit of risk. If you would invest  10,548  in Exxon Mobil Corp on December 18, 2024 and sell it today you would earn a total of  828.00  from holding Exxon Mobil Corp or generate 7.85% return on investment over 90 days.

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

Exxon Mobil Corp  vs.  Elevation Series Trust

Exxon Mobil Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting basic indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Elevation Series Trust

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Elevation Series Trust are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Elevation Series is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Exxon and Elevation Series

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

The idea behind Exxon Mobil Corp and Elevation Series Trust 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 Global Correlations module to find global opportunities by holding instruments from different markets.