Correlation Between Chevron Corp and Aberdeen Diversified
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Aberdeen Diversified 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 Chevron Corp and Aberdeen Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Aberdeen Diversified Income, you can compare the effects of market volatilities on Chevron Corp and Aberdeen Diversified 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 Chevron Corp with a short position of Aberdeen Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Aberdeen Diversified.
Diversification Opportunities for Chevron Corp and Aberdeen Diversified
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and Aberdeen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Aberdeen Diversified Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Diversified and Chevron Corp 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 Chevron Corp are associated (or correlated) with Aberdeen Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Diversified has no effect on the direction of Chevron Corp i.e., Chevron Corp and Aberdeen Diversified go up and down completely randomly.
Pair Corralation between Chevron Corp and Aberdeen Diversified
Assuming the 90 days trading horizon Chevron Corp is expected to under-perform the Aberdeen Diversified. But the stock apears to be less risky and, when comparing its historical volatility, Chevron Corp is 1.58 times less risky than Aberdeen Diversified. The stock trades about -0.05 of its potential returns per unit of risk. The Aberdeen Diversified Income is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,320 in Aberdeen Diversified Income on October 11, 2024 and sell it today you would earn a total of 180.00 from holding Aberdeen Diversified Income or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.56% |
| Values | Daily Returns |
Chevron Corp vs. Aberdeen Diversified Income
Performance |
| Timeline |
| Chevron Corp |
| Aberdeen Diversified |
Chevron Corp and Aberdeen Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Aberdeen Diversified
The main advantage of trading using opposite Chevron Corp and Aberdeen Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Aberdeen Diversified 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 Aberdeen Diversified will offset losses from the drop in Aberdeen Diversified's long position.| Chevron Corp vs. Aberdeen Diversified Income | Chevron Corp vs. Beazer Homes USA | Chevron Corp vs. Pets at Home | Chevron Corp vs. New Residential Investment |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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