Correlation Between Exxon and ProShares Short

Can any of the company-specific risk be diversified away by investing in both Exxon and ProShares Short 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 Short 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 Short Russell2000, you can compare the effects of market volatilities on Exxon and ProShares Short 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 Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ProShares Short.

Diversification Opportunities for Exxon and ProShares Short

-0.63

Correlation Coefficient

Exxon  ProShares Short

Excellent diversification

The 3 months correlation between Exxon and ProShares is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ProShares Short Russell2000 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Russ 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 Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Russ has no effect on the direction of Exxon i.e., Exxon and ProShares Short go up and down completely randomly.

Pair Corralation between Exxon and ProShares Short

Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.21 times more return on investment than ProShares Short. However, Exxon is 1.21 times more volatile than ProShares Short Russell2000. It trades about 0.08 of its potential returns per unit of risk. ProShares Short Russell2000 is currently generating about -0.13 per unit of risk. If you would invest  10,524  in Exxon Mobil Corp on May 2, 2025 and sell it today you would earn a total of  666.00  from holding Exxon Mobil Corp or generate 6.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exxon Mobil Corp  vs.  ProShares Short Russell2000

Exxon Mobil Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Exxon may actually be approaching a critical reversion point that can send shares even higher in August 2025.

ProShares Short Russ

Risk-Adjusted Performance

Very Weak

Over the last 90 days ProShares Short Russell2000 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Etf's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the ETF investors.

Pair Trading with Exxon and ProShares Short

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

The idea behind Exxon Mobil Corp and ProShares Short Russell2000 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.