Correlation Between Exxon and ProShares

Can any of the company-specific risk be diversified away by investing in both Exxon and ProShares 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 ProShares 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 ProShares K 1 Free, you can compare the effects of market volatilities on Exxon and ProShares 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 ProShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ProShares.

Diversification Opportunities for Exxon and ProShares

0.38

Correlation Coefficient

Exxon  ProShares

Weak diversification

The 3 months correlation between Exxon and ProShares is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ProShares K 1 Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares K 1 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 ProShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares K 1 has no effect on the direction of Exxon i.e., Exxon and ProShares go up and down completely randomly.

Pair Corralation between Exxon and ProShares

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 0.92 times more return on investment than ProShares. However, Exxon Mobil Corp is 1.08 times less risky than ProShares. It trades about 0.03 of its potential returns per unit of risk. ProShares K 1 Free is currently generating about -0.03 per unit of risk. If you would invest  11,009  in Exxon Mobil Corp on July 4, 2025 and sell it today you would earn a total of  190.00  from holding Exxon Mobil Corp or generate 1.73% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Exxon Mobil Corp  vs.  ProShares K 1 Free

Exxon Mobil Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 2 (%) 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.

ProShares K 1

Risk-Adjusted Performance

Weakest

Over the last 90 days ProShares K 1 Free has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, ProShares is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Exxon and ProShares

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

The idea behind Exxon Mobil Corp and ProShares K 1 Free 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.