Correlation Between Exxon and Grayscale Chainlink

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

Diversification Opportunities for Exxon and Grayscale Chainlink

-0.64

Correlation Coefficient

Exxon  Grayscale Chainlink

Excellent diversification

The 3 months correlation between Exxon and Grayscale is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Exxon Mobil Corp and Grayscale Chainlink Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grayscale Chainlink Trust 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 Grayscale Chainlink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grayscale Chainlink Trust has no effect on the direction of Exxon i.e., Exxon and Grayscale Chainlink go up and down completely randomly.

Pair Corralation between Exxon and Grayscale Chainlink

Considering the 90-day investment horizon Exxon Mobil Corp is expected to under-perform the Grayscale Chainlink. But the stock apears to be less risky and, when comparing its historical volatility, Exxon Mobil Corp is 9.99 times less risky than Grayscale Chainlink. The stock trades about -0.12 of its potential returns per unit of risk. The Grayscale Chainlink Trust is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6,995  in Grayscale Chainlink Trust on September 21, 2024 and sell it today you would earn a total of  4,005  from holding Grayscale Chainlink Trust or generate 57.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exxon Mobil Corp  vs.  Grayscale Chainlink Trust

Exxon Mobil Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Grayscale Chainlink Trust

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Grayscale Chainlink Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Grayscale Chainlink disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exxon and Grayscale Chainlink

The main advantage of trading using opposite Exxon and Grayscale Chainlink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exxon position performs unexpectedly, Grayscale Chainlink 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 Grayscale Chainlink will offset losses from the drop in Grayscale Chainlink's long position.

The idea behind Exxon Mobil Corp and Grayscale Chainlink Trust 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 the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.