Correlation Between Chevron Corp and Amgen
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Amgen 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 Amgen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Amgen Inc, you can compare the effects of market volatilities on Chevron Corp and Amgen 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 Amgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Amgen.
Diversification Opportunities for Chevron Corp and Amgen
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and Amgen is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Amgen Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amgen Inc 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 Amgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amgen Inc has no effect on the direction of Chevron Corp i.e., Chevron Corp and Amgen go up and down completely randomly.
Pair Corralation between Chevron Corp and Amgen
Considering the 90-day investment horizon Chevron Corp is expected to generate 3.12 times less return on investment than Amgen. But when comparing it to its historical volatility, Chevron Corp is 1.23 times less risky than Amgen. It trades about 0.02 of its potential returns per unit of risk. Amgen Inc is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 21,090 in Amgen Inc on August 31, 2024 and sell it today you would earn a total of 7,197 from holding Amgen Inc or generate 34.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Amgen Inc
Performance |
| Timeline |
| Chevron Corp |
| Amgen Inc |
Chevron Corp and Amgen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Amgen
The main advantage of trading using opposite Chevron Corp and Amgen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Amgen 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 Amgen will offset losses from the drop in Amgen's long position.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
| Amgen vs. Pfizer Inc | Amgen vs. RLJ Lodging Trust | Amgen vs. Aquagold International | Amgen vs. Stepstone Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance |