Correlation Between Pioneer Natural and Exxon

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

Diversification Opportunities for Pioneer Natural and Exxon

0.84
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Pioneer and Exxon is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Pioneer Natural Resources 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 Pioneer Natural 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 Pioneer Natural Resources 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 Pioneer Natural i.e., Pioneer Natural and Exxon go up and down completely randomly.

Pair Corralation between Pioneer Natural and Exxon

Considering the 90-day investment horizon Pioneer Natural Resources is expected to generate 1.21 times more return on investment than Exxon. However, Pioneer Natural is 1.21 times more volatile than Exxon Mobil Corp. It trades about 0.08 of its potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.08 per unit of risk. If you would invest  8,773  in Pioneer Natural Resources on April 8, 2022 and sell it today you would earn a total of  12,320  from holding Pioneer Natural Resources or generate 140.43% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Pioneer Natural Resources  vs.  Exxon Mobil Corp

 Performance (%) 
      Timeline 
Pioneer Natural Resources 
Pioneer Performance
0 of 100
Over the last 90 days Pioneer Natural Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest sluggish performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0574
Payout Ratio
0.78
Forward Annual Dividend Rate
12.34
Dividend Date
2022-06-14
Ex Dividend Date
2022-05-27

Pioneer Price Channel

Exxon Mobil Corp 
Exxon Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Exxon Mobil Corp are ranked lower than 1 (%) 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 newest stock price chaos, may contribute to medium-term losses for the stakeholders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0415
Payout Ratio
0.52
Last Split Factor
2:1
Forward Annual Dividend Rate
3.52
Dividend Date
2022-06-10
Ex Dividend Date
2022-05-12
Last Split Date
2001-07-19

Exxon Price Channel

Pioneer Natural and Exxon Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Pioneer Natural and Exxon

The main advantage of trading using opposite Pioneer Natural and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pioneer Natural 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.

Pioneer Natural Resources

Pair trading matchups for Pioneer Natural

The idea behind Pioneer Natural Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.

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