Correlation Between Chevron Corp and REX FANG
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and REX FANG 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 REX FANG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and REX FANG Innovation, you can compare the effects of market volatilities on Chevron Corp and REX FANG 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 REX FANG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and REX FANG.
Diversification Opportunities for Chevron Corp and REX FANG
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and REX is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and REX FANG Innovation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REX FANG Innovation 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 REX FANG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REX FANG Innovation has no effect on the direction of Chevron Corp i.e., Chevron Corp and REX FANG go up and down completely randomly.
Pair Corralation between Chevron Corp and REX FANG
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.55 times less return on investment than REX FANG. In addition to that, Chevron Corp is 1.12 times more volatile than REX FANG Innovation. It trades about 0.04 of its total potential returns per unit of risk. REX FANG Innovation is currently generating about 0.07 per unit of volatility. If you would invest 4,708 in REX FANG Innovation on September 1, 2024 and sell it today you would earn a total of 412.00 from holding REX FANG Innovation or generate 8.75% 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. REX FANG Innovation
Performance |
| Timeline |
| Chevron Corp |
| REX FANG Innovation |
Chevron Corp and REX FANG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and REX FANG
The main advantage of trading using opposite Chevron Corp and REX FANG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, REX FANG 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 REX FANG will offset losses from the drop in REX FANG'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 |
| REX FANG vs. Freedom Day Dividend | REX FANG vs. iShares MSCI China | REX FANG vs. iShares Dividend and | REX FANG vs. SmartETFs Dividend Builder |
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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