Correlation Between Chevron Corp and Addex Therapeutics
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Addex Therapeutics 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 Addex Therapeutics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Addex Therapeutics, you can compare the effects of market volatilities on Chevron Corp and Addex Therapeutics 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 Addex Therapeutics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Addex Therapeutics.
Diversification Opportunities for Chevron Corp and Addex Therapeutics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and Addex is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Addex Therapeutics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addex Therapeutics 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 Addex Therapeutics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addex Therapeutics has no effect on the direction of Chevron Corp i.e., Chevron Corp and Addex Therapeutics go up and down completely randomly.
Pair Corralation between Chevron Corp and Addex Therapeutics
Considering the 90-day investment horizon Chevron Corp is expected to generate 15.14 times less return on investment than Addex Therapeutics. But when comparing it to its historical volatility, Chevron Corp is 5.26 times less risky than Addex Therapeutics. It trades about 0.01 of its potential returns per unit of risk. Addex Therapeutics is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,446 in Addex Therapeutics on August 26, 2024 and sell it today you would lose (693.00) from holding Addex Therapeutics or give up 47.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Addex Therapeutics
Performance |
| Timeline |
| Chevron Corp |
| Addex Therapeutics |
Chevron Corp and Addex Therapeutics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Addex Therapeutics
The main advantage of trading using opposite Chevron Corp and Addex Therapeutics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Addex Therapeutics 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 Addex Therapeutics will offset losses from the drop in Addex Therapeutics' long position.| Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Suncor Energy | Chevron Corp vs. Cenovus Energy | Chevron Corp vs. Petrleo Brasileiro SA |
| Addex Therapeutics vs. Innate Pharma | Addex Therapeutics vs. Aptorum Group Ltd | Addex Therapeutics vs. Dyadic International | Addex Therapeutics vs. Soligenix |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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