Correlation Between Exxon and Deutsche California
Can any of the company-specific risk be diversified away by investing in both Exxon and Deutsche California 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 Deutsche California 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 Deutsche California Tax Free, you can compare the effects of market volatilities on Exxon and Deutsche California 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 Deutsche California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and Deutsche California.
Diversification Opportunities for Exxon and Deutsche California
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Exxon and Deutsche is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Deutsche California Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche California Tax 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 Deutsche California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche California Tax has no effect on the direction of Exxon i.e., Exxon and Deutsche California go up and down completely randomly.
Pair Corralation between Exxon and Deutsche California
Considering the 90-day investment horizon Exxon is expected to generate 1.16 times less return on investment than Deutsche California. In addition to that, Exxon is 5.61 times more volatile than Deutsche California Tax Free. It trades about 0.07 of its total potential returns per unit of risk. Deutsche California Tax Free is currently generating about 0.43 per unit of volatility. If you would invest 628.00 in Deutsche California Tax Free on July 27, 2025 and sell it today you would earn a total of 36.00 from holding Deutsche California Tax Free or generate 5.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Exxon Mobil Corp vs. Deutsche California Tax Free
Performance |
| Timeline |
| Exxon Mobil Corp |
| Deutsche California Tax |
Exxon and Deutsche California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and Deutsche California
The main advantage of trading using opposite Exxon and Deutsche California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Deutsche California 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 Deutsche California will offset losses from the drop in Deutsche California's long position.| Exxon vs. Shell PLC ADR | Exxon vs. BP PLC ADR | Exxon vs. Suncor Energy | Exxon vs. Petroleo Brasileiro Petrobras |
| Deutsche California vs. T Rowe Price | Deutsche California vs. Gmo High Yield | Deutsche California vs. Aqr Risk Parity | Deutsche California vs. Ab High Income |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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