Correlation Between Chevron Corp and Gold Fields
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Gold Fields 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 Gold Fields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Gold Fields Ltd, you can compare the effects of market volatilities on Chevron Corp and Gold Fields 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 Gold Fields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Gold Fields.
Diversification Opportunities for Chevron Corp and Gold Fields
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Chevron and Gold is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields 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 Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Chevron Corp i.e., Chevron Corp and Gold Fields go up and down completely randomly.
Pair Corralation between Chevron Corp and Gold Fields
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.43 times more return on investment than Gold Fields. However, Chevron Corp is 2.34 times less risky than Gold Fields. It trades about 0.14 of its potential returns per unit of risk. Gold Fields Ltd is currently generating about 0.04 per unit of risk. If you would invest 14,613 in Chevron Corp on August 23, 2024 and sell it today you would earn a total of 1,550 from holding Chevron Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Gold Fields Ltd
Performance |
| Timeline |
| Chevron Corp |
| Gold Fields |
Chevron Corp and Gold Fields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Gold Fields
The main advantage of trading using opposite Chevron Corp and Gold Fields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Gold Fields 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 Gold Fields will offset losses from the drop in Gold Fields' long position.| Chevron Corp vs. Exxon Mobil Corp | Chevron Corp vs. Small Cap Core | Chevron Corp vs. Freedom Holding Corp | Chevron Corp vs. Gfl Environmental Holdings |
| Gold Fields vs. Agnico Eagle Mines | Gold Fields vs. Pan American Silver | Gold Fields vs. Kinross Gold | Gold Fields vs. B2Gold Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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