Correlation Between Exxon and CNA Financial
Can any of the company-specific risk be diversified away by investing in both Exxon and CNA Financial 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 CNA Financial 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 CNA Financial, you can compare the effects of market volatilities on Exxon and CNA Financial 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 CNA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and CNA Financial.
Diversification Opportunities for Exxon and CNA Financial
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and CNA is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and CNA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNA Financial 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 CNA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNA Financial has no effect on the direction of Exxon i.e., Exxon and CNA Financial go up and down completely randomly.
Pair Corralation between Exxon and CNA Financial
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.15 times more return on investment than CNA Financial. However, Exxon is 1.15 times more volatile than CNA Financial. It trades about 0.08 of its potential returns per unit of risk. CNA Financial is currently generating about -0.06 per unit of risk. If you would invest 11,077 in Exxon Mobil Corp on August 25, 2025 and sell it today you would earn a total of 631.00 from holding Exxon Mobil Corp or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. CNA Financial
Performance |
| Timeline |
| Exxon Mobil Corp |
| CNA Financial |
Exxon and CNA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and CNA Financial
The main advantage of trading using opposite Exxon and CNA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, CNA Financial 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 CNA Financial will offset losses from the drop in CNA Financial's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| CNA Financial vs. American Financial Group | CNA Financial vs. Kinsale Capital Group | CNA Financial vs. Renaissancere Holdings | CNA Financial vs. Reinsurance Group of |
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 the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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