Correlation Between Chevron Corp and Civitas Resources
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Civitas Resources 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 Civitas Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Civitas Resources, you can compare the effects of market volatilities on Chevron Corp and Civitas Resources 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 Civitas Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Civitas Resources.
Diversification Opportunities for Chevron Corp and Civitas Resources
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and Civitas is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Civitas Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Civitas Resources 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 Civitas Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Civitas Resources has no effect on the direction of Chevron Corp i.e., Chevron Corp and Civitas Resources go up and down completely randomly.
Pair Corralation between Chevron Corp and Civitas Resources
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.1 times more return on investment than Civitas Resources. However, Chevron Corp is 9.74 times less risky than Civitas Resources. It trades about 0.25 of its potential returns per unit of risk. Civitas Resources is currently generating about -0.09 per unit of risk. If you would invest 14,578 in Chevron Corp on August 29, 2024 and sell it today you would earn a total of 1,780 from holding Chevron Corp or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.67% |
| Values | Daily Returns |
Chevron Corp vs. Civitas Resources
Performance |
| Timeline |
| Chevron Corp |
| Civitas Resources |
Chevron Corp and Civitas Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Civitas Resources
The main advantage of trading using opposite Chevron Corp and Civitas Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Civitas Resources 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 Civitas Resources will offset losses from the drop in Civitas Resources' 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 |
| Civitas Resources vs. BCE Inc | Civitas Resources vs. PennantPark Floating Rate | Civitas Resources vs. Harmony Gold Mining | Civitas Resources 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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