Correlation Between Exxon and EA Series
Can any of the company-specific risk be diversified away by investing in both Exxon and EA Series 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 EA Series 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 EA Series Trust, you can compare the effects of market volatilities on Exxon and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and EA Series.
Diversification Opportunities for Exxon and EA Series
Modest diversification
The 3 months correlation between Exxon and STRV is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Exxon i.e., Exxon and EA Series go up and down completely randomly.
Pair Corralation between Exxon and EA Series
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.72 times more return on investment than EA Series. However, Exxon is 1.72 times more volatile than EA Series Trust. It trades about 0.06 of its potential returns per unit of risk. EA Series Trust is currently generating about -0.11 per unit of risk. If you would invest 10,860 in Exxon Mobil Corp on December 1, 2024 and sell it today you would earn a total of 155.00 from holding Exxon Mobil Corp or generate 1.43% 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. EA Series Trust
Performance |
Timeline |
Exxon Mobil Corp |
EA Series Trust |
Exxon and EA Series Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exxon and EA Series
The main advantage of trading using opposite Exxon and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.Exxon vs. BP PLC ADR | Exxon vs. Shell PLC ADR | Exxon vs. Petroleo Brasileiro Petrobras | Exxon vs. Suncor Energy |
EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust | EA Series vs. EA Series Trust |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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