Correlation Between Exxon and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Exxon and ProShares Short 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 ProShares Short 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 ProShares Short SP500, you can compare the effects of market volatilities on Exxon and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exxon and ProShares Short.
Diversification Opportunities for Exxon and ProShares Short
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Exxon and ProShares is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and ProShares Short SP500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short SP500 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short SP500 has no effect on the direction of Exxon i.e., Exxon and ProShares Short go up and down completely randomly.
Pair Corralation between Exxon and ProShares Short
Considering the 90-day investment horizon Exxon Mobil Corp is expected to generate 1.53 times more return on investment than ProShares Short. However, Exxon is 1.53 times more volatile than ProShares Short SP500. It trades about 0.03 of its potential returns per unit of risk. ProShares Short SP500 is currently generating about -0.11 per unit of risk. If you would invest 11,370 in Exxon Mobil Corp on August 31, 2025 and sell it today you would earn a total of 222.00 from holding Exxon Mobil Corp or generate 1.95% 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. ProShares Short SP500
Performance |
| Timeline |
| Exxon Mobil Corp |
| ProShares Short SP500 |
Exxon and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exxon and ProShares Short
The main advantage of trading using opposite Exxon and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short's long position.The idea behind Exxon Mobil Corp and ProShares Short SP500 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.| ProShares Short vs. FT Vest Equity | ProShares Short vs. Northern Lights | ProShares Short vs. Diamond Hill Funds | ProShares Short vs. Dimensional International High |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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