Correlation Between Exxon and GENERAL
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By analyzing existing cross correlation between Exxon Mobil Corp and GENERAL ELEC CAP, you can compare the effects of market volatilities on Exxon and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and GENERAL.
Diversification Opportunities for Exxon and GENERAL
Very weak diversification
The 3 months correlation between Exxon and GENERAL is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and GENERAL ELEC CAP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL ELEC 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL ELEC CAP has no effect on the direction of Exxon i.e., Exxon and GENERAL go up and down completely randomly.
Pair Corralation between Exxon and GENERAL
Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the GENERAL. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 1.32 times less risky than GENERAL. The stock trades about -0.11 of its potential returns per unit of risk. The GENERAL ELEC CAP is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,346 in GENERAL ELEC CAP on October 25, 2024 and sell it today you would lose (148.00) from holding GENERAL ELEC CAP or give up 1.58% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 46.67% |
Values | Daily Returns |
Exxon Mobil Corp vs. GENERAL ELEC CAP
Performance |
Timeline |
Exxon Mobil Corp |
GENERAL ELEC CAP |
Exxon and GENERAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Exxon and GENERAL
The main advantage of trading using opposite Exxon and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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