Correlation Between Exxon and EnQuest PLC
Can any of the company-specific risk be diversified away by investing in both Exxon and EnQuest PLC 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 EnQuest PLC 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 EnQuest PLC, you can compare the effects of market volatilities on Exxon and EnQuest PLC 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 EnQuest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and EnQuest PLC.
Diversification Opportunities for Exxon and EnQuest PLC
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Exxon and EnQuest is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and EnQuest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EnQuest PLC 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 EnQuest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EnQuest PLC has no effect on the direction of Exxon i.e., Exxon and EnQuest PLC go up and down completely randomly.
Pair Corralation between Exxon and EnQuest PLC
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the EnQuest PLC. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 3.71 times less risky than EnQuest PLC. The stock trades about -0.06 of its potential returns per unit of risk. The EnQuest PLC is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 14.00 in EnQuest PLC on December 2, 2024 and sell it today you would earn a total of 2.00 from holding EnQuest PLC or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Exxon Mobil Corp vs. EnQuest PLC
Performance |
Timeline |
Exxon Mobil Corp |
EnQuest PLC |
Exxon and EnQuest PLC Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exxon and EnQuest PLC
The main advantage of trading using opposite Exxon and EnQuest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, EnQuest PLC 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 EnQuest PLC will offset losses from the drop in EnQuest PLC's long position.Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
EnQuest PLC vs. ADX Energy | EnQuest PLC vs. Pine Cliff Energy | EnQuest PLC vs. AER Energy Resources | EnQuest PLC vs. Headwater Exploration |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |