Correlation Between Exxon and Enerplus

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

Diversification Opportunities for Exxon and Enerplus

0.0

Correlation Coefficient

Exxon  Enerplus

Pay attention - limited upside

The 3 months correlation between Exxon and Enerplus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Enerplus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enerplus 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 Enerplus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enerplus has no effect on the direction of Exxon i.e., Exxon and Enerplus go up and down completely randomly.

Pair Corralation between Exxon and Enerplus

If you would invest  10,457  in Exxon Mobil Corp on December 19, 2024 and sell it today you would earn a total of  907.00  from holding Exxon Mobil Corp or generate 8.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Exxon Mobil Corp  vs.  Enerplus

Exxon Mobil Corp

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Enerplus

Risk-Adjusted Performance

Very Weak

Over the last 90 days Enerplus has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Enerplus is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Exxon and Enerplus

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

The idea behind Exxon Mobil Corp and Enerplus 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..