Correlation Between Sligro Food and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Sligro Food and Chevron Corp 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 Sligro Food and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sligro Food Group and Chevron Corp, you can compare the effects of market volatilities on Sligro Food and Chevron Corp 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 Sligro Food with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sligro Food and Chevron Corp.
Diversification Opportunities for Sligro Food and Chevron Corp
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sligro and Chevron is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sligro Food Group and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Sligro Food 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 Sligro Food Group are associated (or correlated) with Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Sligro Food i.e., Sligro Food and Chevron Corp go up and down completely randomly.
Pair Corralation between Sligro Food and Chevron Corp
Assuming the 90 days trading horizon Sligro Food Group is expected to under-perform the Chevron Corp. In addition to that, Sligro Food is 2.62 times more volatile than Chevron Corp. It trades about -0.09 of its total potential returns per unit of risk. Chevron Corp is currently generating about 1.02 per unit of volatility. If you would invest 14,168 in Chevron Corp on October 20, 2024 and sell it today you would earn a total of 1,969 from holding Chevron Corp or generate 13.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sligro Food Group vs. Chevron Corp
Performance |
| Timeline |
| Sligro Food Group |
| Chevron Corp |
Sligro Food and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sligro Food and Chevron Corp
The main advantage of trading using opposite Sligro Food and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sligro Food position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.| Sligro Food vs. Delta Air Lines | Sligro Food vs. Tyson Foods Cl | Sligro Food vs. Alaska Air Group | Sligro Food vs. Porvair plc |
| Chevron Corp vs. Teradata Corp | Chevron Corp vs. Tatton Asset Management | Chevron Corp vs. Public Storage | Chevron Corp vs. Gaztransport et Technigaz |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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