Correlation Between Exxon and Msvif Mid

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

Diversification Opportunities for Exxon and Msvif Mid

0.24

Correlation Coefficient

Exxon  Msvif Mid

Modest diversification

The 3 months correlation between Exxon and Msvif is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Msvif Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Msvif Mid Cap 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 Msvif Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Msvif Mid Cap has no effect on the direction of Exxon i.e., Exxon and Msvif Mid go up and down completely randomly.

Pair Corralation between Exxon and Msvif Mid

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.71 times more return on investment than Msvif Mid. However, Exxon Mobil Corp is 1.42 times less risky than Msvif Mid. It trades about 0.06 of its potential returns per unit of risk. Msvif Mid Cap is currently generating about -0.54 per unit of risk. If you would invest  10,999  in Exxon Mobil Corp on December 11, 2024 and sell it today you would earn a total of  181.00  from holding Exxon Mobil Corp or generate 1.65% 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.  Msvif Mid Cap

Exxon Mobil Corp

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Exxon is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Msvif Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Msvif Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Exxon and Msvif Mid

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

The idea behind Exxon Mobil Corp and Msvif Mid Cap 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.