Correlation Between Chevron Corp and Fidelity Covington
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Fidelity Covington 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 Fidelity Covington into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Fidelity Covington Trust, you can compare the effects of market volatilities on Chevron Corp and Fidelity Covington 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 Fidelity Covington. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Fidelity Covington.
Diversification Opportunities for Chevron Corp and Fidelity Covington
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and Fidelity is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Fidelity Covington Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Covington Trust 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 Fidelity Covington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Covington Trust has no effect on the direction of Chevron Corp i.e., Chevron Corp and Fidelity Covington go up and down completely randomly.
Pair Corralation between Chevron Corp and Fidelity Covington
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.23 times less return on investment than Fidelity Covington. But when comparing it to its historical volatility, Chevron Corp is 1.05 times less risky than Fidelity Covington. It trades about 0.04 of its potential returns per unit of risk. Fidelity Covington Trust is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 2,251 in Fidelity Covington Trust on September 1, 2024 and sell it today you would earn a total of 288.00 from holding Fidelity Covington Trust or generate 12.79% 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. Fidelity Covington Trust
Performance |
| Timeline |
| Chevron Corp |
| Fidelity Covington Trust |
Chevron Corp and Fidelity Covington Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Fidelity Covington
The main advantage of trading using opposite Chevron Corp and Fidelity Covington positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Fidelity Covington 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 Fidelity Covington will offset losses from the drop in Fidelity Covington'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 |
| Fidelity Covington vs. Vanguard Growth Index | Fidelity Covington vs. iShares Russell 1000 | Fidelity Covington vs. iShares SP 500 | Fidelity Covington vs. iShares Core SP |
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 Stocks Directory module to find actively traded stocks across global markets.
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