Correlation Between Chevron Corp and EA Series
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and EA Series 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 EA Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and EA Series Trust, you can compare the effects of market volatilities on Chevron Corp and EA Series 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 EA Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and EA Series.
Diversification Opportunities for Chevron Corp and EA Series
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and BUXX is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and EA Series Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EA Series Trust 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 EA Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EA Series Trust has no effect on the direction of Chevron Corp i.e., Chevron Corp and EA Series go up and down completely randomly.
Pair Corralation between Chevron Corp and EA Series
Considering the 90-day investment horizon Chevron Corp is expected to generate 13.22 times more return on investment than EA Series. However, Chevron Corp is 13.22 times more volatile than EA Series Trust. It trades about 0.29 of its potential returns per unit of risk. EA Series Trust is currently generating about 0.25 per unit of risk. If you would invest 15,242 in Chevron Corp on September 3, 2024 and sell it today you would earn a total of 951.00 from holding Chevron Corp or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. EA Series Trust
Performance |
| Timeline |
| Chevron Corp |
| EA Series Trust |
Chevron Corp and EA Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and EA Series
The main advantage of trading using opposite Chevron Corp and EA Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, EA Series 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 EA Series will offset losses from the drop in EA Series' long position.The idea behind Chevron Corp and EA Series Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| EA Series vs. SCOR PK | EA Series vs. HUMANA INC | EA Series vs. Aquagold International | EA Series vs. Barloworld Ltd ADR |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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