Correlation Between Exxon and VictoryShares Value

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

Diversification Opportunities for Exxon and VictoryShares Value

0.63

Correlation Coefficient

Exxon  VictoryShares Value

Poor diversification

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

Pair Corralation between Exxon and VictoryShares Value

Considering the 90-day investment horizon Exxon is expected to generate 1.17 times less return on investment than VictoryShares Value. In addition to that, Exxon is 1.79 times more volatile than VictoryShares Value Momentum. It trades about 0.08 of its total potential returns per unit of risk. VictoryShares Value Momentum is currently generating about 0.16 per unit of volatility. If you would invest  7,919  in VictoryShares Value Momentum on May 2, 2025 and sell it today you would earn a total of  605.00  from holding VictoryShares Value Momentum or generate 7.64% return on investment over 90 days.

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

Exxon Mobil Corp  vs.  VictoryShares Value Momentum

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.

VictoryShares Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Value Momentum are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, VictoryShares Value may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Exxon and VictoryShares Value

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

The idea behind Exxon Mobil Corp and VictoryShares Value Momentum 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.