Correlation Between Chevron Corp and Crescent Energy
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Crescent Energy 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 Crescent Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Crescent Energy Co, you can compare the effects of market volatilities on Chevron Corp and Crescent Energy 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 Crescent Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Crescent Energy.
Diversification Opportunities for Chevron Corp and Crescent Energy
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chevron and Crescent is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Crescent Energy Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Energy 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 Crescent Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Energy has no effect on the direction of Chevron Corp i.e., Chevron Corp and Crescent Energy go up and down completely randomly.
Pair Corralation between Chevron Corp and Crescent Energy
Considering the 90-day investment horizon Chevron Corp is expected to generate 7.35 times less return on investment than Crescent Energy. But when comparing it to its historical volatility, Chevron Corp is 1.99 times less risky than Crescent Energy. It trades about 0.02 of its potential returns per unit of risk. Crescent Energy Co is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,168 in Crescent Energy Co on September 15, 2024 and sell it today you would earn a total of 292.00 from holding Crescent Energy Co or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Crescent Energy Co
Performance |
| Timeline |
| Chevron Corp |
| Crescent Energy |
Chevron Corp and Crescent Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Crescent Energy
The main advantage of trading using opposite Chevron Corp and Crescent Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Crescent Energy 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 Crescent Energy will offset losses from the drop in Crescent Energy's long position.| Chevron Corp vs. Aquagold International | Chevron Corp vs. Thrivent High Yield | Chevron Corp vs. Morningstar Unconstrained Allocation | Chevron Corp vs. Via Renewables |
| Crescent Energy vs. Exxon Mobil Corp | Crescent Energy vs. Chevron Corp | Crescent Energy vs. TotalEnergies SE ADR | Crescent Energy vs. Petroleo Brasileiro Petrobras |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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