Correlation Between Chevron Corp and Calian Group
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Calian Group 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 Calian Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Calian Group, you can compare the effects of market volatilities on Chevron Corp and Calian Group 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 Calian Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Calian Group.
Diversification Opportunities for Chevron Corp and Calian Group
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and Calian is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Calian Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Calian Group 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 Calian Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Calian Group has no effect on the direction of Chevron Corp i.e., Chevron Corp and Calian Group go up and down completely randomly.
Pair Corralation between Chevron Corp and Calian Group
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.5 times more return on investment than Calian Group. However, Chevron Corp is 1.99 times less risky than Calian Group. It trades about 0.23 of its potential returns per unit of risk. Calian Group is currently generating about -0.12 per unit of risk. If you would invest 14,578 in Chevron Corp on August 30, 2024 and sell it today you would earn a total of 1,633 from holding Chevron Corp or generate 11.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Chevron Corp vs. Calian Group
Performance |
| Timeline |
| Chevron Corp |
| Calian Group |
Chevron Corp and Calian Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Calian Group
The main advantage of trading using opposite Chevron Corp and Calian Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Calian Group 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 Calian Group will offset losses from the drop in Calian Group's 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 |
| Calian Group vs. Deere Company | Calian Group vs. Columbus McKinnon | Calian Group vs. Hyster Yale Materials Handling | Calian Group vs. Manitowoc |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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