Correlation Between Chevron Corp and Big Lots
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Big Lots 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 Big Lots into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Big Lots, you can compare the effects of market volatilities on Chevron Corp and Big Lots 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 Big Lots. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Big Lots.
Diversification Opportunities for Chevron Corp and Big Lots
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and Big is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Big Lots in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Lots 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 Big Lots. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Lots has no effect on the direction of Chevron Corp i.e., Chevron Corp and Big Lots go up and down completely randomly.
Pair Corralation between Chevron Corp and Big Lots
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.17 times more return on investment than Big Lots. However, Chevron Corp is 6.06 times less risky than Big Lots. It trades about 0.01 of its potential returns per unit of risk. Big Lots is currently generating about -0.1 per unit of risk. If you would invest 16,160 in Chevron Corp on August 31, 2024 and sell it today you would earn a total of 33.00 from holding Chevron Corp or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 89.75% |
| Values | Daily Returns |
Chevron Corp vs. Big Lots
Performance |
| Timeline |
| Chevron Corp |
| Big Lots |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and Big Lots Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Big Lots
The main advantage of trading using opposite Chevron Corp and Big Lots positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Big Lots 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 Big Lots will offset losses from the drop in Big Lots' long position.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
| Big Lots vs. BJs Wholesale Club | Big Lots vs. Dollar General | Big Lots vs. Costco Wholesale Corp | Big Lots vs. Walmart |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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