Correlation Between Chevron Corp and AmTrust Financial
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and AmTrust Financial 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 AmTrust Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and AmTrust Financial Services, you can compare the effects of market volatilities on Chevron Corp and AmTrust Financial 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 AmTrust Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and AmTrust Financial.
Diversification Opportunities for Chevron Corp and AmTrust Financial
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chevron and AmTrust is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and AmTrust Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmTrust Financial 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 AmTrust Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmTrust Financial has no effect on the direction of Chevron Corp i.e., Chevron Corp and AmTrust Financial go up and down completely randomly.
Pair Corralation between Chevron Corp and AmTrust Financial
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.88 times more return on investment than AmTrust Financial. However, Chevron Corp is 1.14 times less risky than AmTrust Financial. It trades about 0.35 of its potential returns per unit of risk. AmTrust Financial Services is currently generating about -0.06 per unit of risk. If you would invest 14,893 in Chevron Corp on August 25, 2024 and sell it today you would earn a total of 1,343 from holding Chevron Corp or generate 9.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. AmTrust Financial Services
Performance |
| Timeline |
| Chevron Corp |
| AmTrust Financial |
Chevron Corp and AmTrust Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and AmTrust Financial
The main advantage of trading using opposite Chevron Corp and AmTrust Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, AmTrust Financial 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 AmTrust Financial will offset losses from the drop in AmTrust Financial's long position.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
| AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services | AmTrust Financial vs. AmTrust Financial Services |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |