Correlation Between Exxon and Twitter
Can any of the company-specific risk be diversified away by investing in both Exxon and Twitter 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 Twitter 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 Twitter, you can compare the effects of market volatilities on Exxon and Twitter 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 Twitter. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Twitter.
Diversification Opportunities for Exxon and Twitter
Very poor diversification
The 3 months correlation between Exxon and Twitter is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Twitter in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twitter 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 Twitter. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twitter has no effect on the direction of Exxon i.e., Exxon and Twitter go up and down completely randomly.
Pair Corralation between Exxon and Twitter
If you would invest 10,477 in Exxon Mobil Corp on January 19, 2024 and sell it today you would earn a total of 1,386 from holding Exxon Mobil Corp or generate 13.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.44% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Twitter
Performance |
| Timeline |
| Exxon Mobil Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Exxon and Twitter Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Twitter
The main advantage of trading using opposite Exxon and Twitter positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Twitter 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 Twitter will offset losses from the drop in Twitter's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Twitter vs. Harmony Gold Mining | Twitter vs. Balchem | Twitter vs. Chester Mining | Twitter vs. Titan Petrochemicals Group |
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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