Correlation Between Exxon and Moneygram Int

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

Diversification Opportunities for Exxon and Moneygram Int

-0.57

Correlation Coefficient

Exxon  Moneygram Int

Excellent diversification

The 3 months correlation between Exxon and Moneygram is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Moneygram Int in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moneygram Int 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 Moneygram Int. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moneygram Int has no effect on the direction of Exxon i.e., Exxon and Moneygram Int go up and down completely randomly.

Pair Corralation between Exxon and Moneygram Int

Considering the 90-day investment horizon Exxon is expected to generate 1.6 times less return on investment than Moneygram Int. But when comparing it to its historical volatility, Exxon Mobil Corp is 1.25 times less risky than Moneygram Int. It trades about 0.01 of its potential returns per unit of risk. Moneygram Int is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,092  in Moneygram Int on October 5, 2024 and sell it today you would earn a total of  7.00  from holding Moneygram Int or generate 0.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	20.2%
Values	Daily Returns

Exxon Mobil Corp  vs.  Moneygram Int

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 weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Moneygram Int

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Moneygram Int has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Moneygram Int is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Exxon and Moneygram Int

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

The idea behind Exxon Mobil Corp and Moneygram Int 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.