Correlation Between American Express and CHEVRON
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By analyzing existing cross correlation between American Express and CHEVRON USA INC, you can compare the effects of market volatilities on American Express and CHEVRON 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 American Express with a short position of CHEVRON. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Express and CHEVRON.
Diversification Opportunities for American Express and CHEVRON
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and CHEVRON is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding American Express and CHEVRON USA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEVRON USA INC and American Express 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 American Express are associated (or correlated) with CHEVRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEVRON USA INC has no effect on the direction of American Express i.e., American Express and CHEVRON go up and down completely randomly.
Pair Corralation between American Express and CHEVRON
Considering the 90-day investment horizon American Express is expected to generate 1.7 times more return on investment than CHEVRON. However, American Express is 1.7 times more volatile than CHEVRON USA INC. It trades about 0.25 of its potential returns per unit of risk. CHEVRON USA INC is currently generating about -0.07 per unit of risk. If you would invest 27,408 in American Express on August 31, 2024 and sell it today you would earn a total of 3,017 from holding American Express or generate 11.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
American Express vs. CHEVRON USA INC
Performance |
| Timeline |
| American Express |
| CHEVRON USA INC |
American Express and CHEVRON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Express and CHEVRON
The main advantage of trading using opposite American Express and CHEVRON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Express position performs unexpectedly, CHEVRON 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 will offset losses from the drop in CHEVRON's long position.| American Express vs. Visa Class A | American Express vs. RLJ Lodging Trust | American Express vs. Aquagold International | American Express vs. Stepstone Group |
| CHEVRON vs. AEP TEX INC | CHEVRON vs. US BANK NATIONAL | CHEVRON vs. Bank of America | CHEVRON vs. GE Aerospace |
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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