Correlation Between Exxon and Healthwell Acquisition

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

Diversification Opportunities for Exxon and Healthwell Acquisition

-0.68

Correlation Coefficient

Exxon  Healthwell Acquisition

Excellent diversification

The 3 months correlation between Exxon and Healthwell is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Healthwell Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthwell Acquisition 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 Healthwell Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthwell Acquisition has no effect on the direction of Exxon i.e., Exxon and Healthwell Acquisition go up and down completely randomly.

Pair Corralation between Exxon and Healthwell Acquisition

If you would invest  21.00  in Healthwell Acquisition Corp on October 22, 2024 and sell it today you would earn a total of  0.00  from holding Healthwell Acquisition Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.61%
Values	Daily Returns

Exxon Mobil Corp  vs.  Healthwell Acquisition Corp

Exxon Mobil Corp

Risk-Adjusted Performance

0 of 100

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 current stock price disarray, may contribute to short-term losses for the investors.

Healthwell Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Healthwell Acquisition Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable essential indicators, Healthwell Acquisition is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Exxon and Healthwell Acquisition

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

The idea behind Exxon Mobil Corp and Healthwell Acquisition Corp 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.