Correlation Between Chevron Corp and Coastal Capital
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Coastal Capital 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 Coastal Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Coastal Capital Acq, you can compare the effects of market volatilities on Chevron Corp and Coastal Capital 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 Coastal Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Coastal Capital.
Diversification Opportunities for Chevron Corp and Coastal Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and Coastal is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Coastal Capital Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coastal Capital Acq 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 Coastal Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coastal Capital Acq has no effect on the direction of Chevron Corp i.e., Chevron Corp and Coastal Capital go up and down completely randomly.
Pair Corralation between Chevron Corp and Coastal Capital
Considering the 90-day investment horizon Chevron Corp is expected to generate 48.13 times less return on investment than Coastal Capital. But when comparing it to its historical volatility, Chevron Corp is 18.91 times less risky than Coastal Capital. It trades about 0.04 of its potential returns per unit of risk. Coastal Capital Acq is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 0.11 in Coastal Capital Acq on September 1, 2024 and sell it today you would lose (0.03) from holding Coastal Capital Acq or give up 27.27% 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. Coastal Capital Acq
Performance |
| Timeline |
| Chevron Corp |
| Coastal Capital Acq |
Chevron Corp and Coastal Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Coastal Capital
The main advantage of trading using opposite Chevron Corp and Coastal Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Coastal Capital 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 Coastal Capital will offset losses from the drop in Coastal Capital's long position.| Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Equinor ASA ADR | Chevron Corp vs. Petrleo Brasileiro SA |
| Coastal Capital vs. American Leisure Holdings | Coastal Capital vs. Supurva Healthcare Group | Coastal Capital vs. China Health Management | Coastal Capital vs. Embrace Change Acquisition |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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