Correlation Between Exxon and Teucrium Corn

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

Diversification Opportunities for Exxon and Teucrium Corn

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Exxon and Teucrium is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Teucrium Corn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Corn 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 Teucrium Corn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Corn has no effect on the direction of Exxon i.e., Exxon and Teucrium Corn go up and down completely randomly.

Pair Corralation between Exxon and Teucrium Corn

Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Teucrium Corn. In addition to that, Exxon is 1.29 times more volatile than Teucrium Corn. It trades about -0.04 of its total potential returns per unit of risk. Teucrium Corn is currently generating about -0.03 per unit of volatility. If you would invest  2,822  in Teucrium Corn on June 29, 2022 and sell it today you would lose (158.00)  from holding Teucrium Corn or give up 5.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Exxon Mobil Corp  vs.  Teucrium Corn

 Performance (%) 
       Timeline  
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

Teucrium Corn 
Teucrium Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Teucrium Corn are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Teucrium Corn is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Teucrium Price Channel

Exxon and Teucrium Corn Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Exxon and Teucrium Corn

The main advantage of trading using opposite Exxon and Teucrium Corn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Teucrium Corn 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 Teucrium Corn will offset losses from the drop in Teucrium Corn's long position.
Exxon vs. Kibush Capital Corp
The idea behind Exxon Mobil Corp and Teucrium Corn 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.
Teucrium Corn vs. SP 500 SPDR
Teucrium Corn vs. JP Morgan Chase
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 Stock Screener module to find equities using custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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