Correlation Between Greenwich Lifesciences and Exxon

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Can any of the company-specific risk be diversified away by investing in both Greenwich Lifesciences and Exxon 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 Greenwich Lifesciences and Exxon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenwich Lifesciences and Exxon Mobil Corp, you can compare the effects of market volatilities on Greenwich Lifesciences and Exxon 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 Greenwich Lifesciences with a short position of Exxon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenwich Lifesciences and Exxon.

Diversification Opportunities for Greenwich Lifesciences and Exxon

  Correlation Coefficient

Very good diversification

The 3 months correlation between Greenwich and Exxon is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Greenwich Lifesciences and Exxon Mobil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp and Greenwich Lifesciences 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 Greenwich Lifesciences are associated (or correlated) with Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Greenwich Lifesciences i.e., Greenwich Lifesciences and Exxon go up and down completely randomly.

Pair Corralation between Greenwich Lifesciences and Exxon

Given the investment horizon of 90 days Greenwich Lifesciences is expected to generate 2.19 times less return on investment than Exxon. In addition to that, Greenwich Lifesciences is 1.98 times more volatile than Exxon Mobil Corp. It trades about 0.06 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.26 per unit of volatility. If you would invest  8,373  in Exxon Mobil Corp on May 16, 2022 and sell it today you would earn a total of  1,027  from holding Exxon Mobil Corp or generate 12.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
ValuesDaily Returns

Greenwich Lifesciences  vs.  Exxon Mobil Corp

 Performance (%) 
Greenwich Lifesciences 
Greenwich Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Greenwich Lifesciences are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly sluggish basic indicators, Greenwich Lifesciences reported solid returns over the last few months and may actually be approaching a breakup point.

Greenwich Price Channel

Exxon Mobil Corp 
Exxon Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively steady basic indicators, Exxon is not utilizing all of its potentials. The new stock price chaos, may contribute to medium-term losses for the stakeholders.

Exxon Price Channel

Greenwich Lifesciences and Exxon Volatility Contrast

   Predicted Return Density   

Pair Trading with Greenwich Lifesciences and Exxon

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

Greenwich Lifesciences

Pair trading matchups for Greenwich Lifesciences

The idea behind Greenwich Lifesciences and Exxon Mobil Corp 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.
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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