Correlation Between Oakmark International and Exxon

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

Diversification Opportunities for Oakmark International and Exxon

0.23
  Correlation Coefficient

Modest diversification

The 3 months correlation between Oakmark and Exxon is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Oakmark International Small 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 Oakmark International 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 Oakmark International Small 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 Oakmark International i.e., Oakmark International and Exxon go up and down completely randomly.

Pair Corralation between Oakmark International and Exxon

Assuming the 90 days horizon Oakmark International Small is expected to generate 0.79 times more return on investment than Exxon. However, Oakmark International Small is 1.26 times less risky than Exxon. It trades about -0.29 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about -0.36 per unit of risk. If you would invest  1,483  in Oakmark International Small on June 30, 2022 and sell it today you would lose (138.00)  from holding Oakmark International Small or give up 9.31% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Oakmark International Small  vs.  Exxon Mobil Corp

 Performance (%) 
       Timeline  
Oakmark International 
Oakmark Performance
0 of 100
Over the last 90 days Oakmark International Small has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Oakmark Price Channel

Exxon Mobil Corp 
Exxon Performance
0 of 100
Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Exxon is not utilizing all of its potentials. The latest stock price chaos, may contribute to medium-term losses for the stakeholders.

Exxon Price Channel

Oakmark International and Exxon Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Oakmark International and Exxon

The main advantage of trading using opposite Oakmark International and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oakmark International 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.
Oakmark International vs. Bank Of America
The idea behind Oakmark International Small 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.
Exxon vs. Kibush Capital Corp
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 CEO Directory module to screen CEOs from public companies around the world.

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