Correlation Between Chevron Corp and Hexo Corp
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Hexo Corp 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 Hexo Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Hexo Corp, you can compare the effects of market volatilities on Chevron Corp and Hexo Corp 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 Hexo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Hexo Corp.
Diversification Opportunities for Chevron Corp and Hexo Corp
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and Hexo is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Hexo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hexo Corp 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 Hexo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hexo Corp has no effect on the direction of Chevron Corp i.e., Chevron Corp and Hexo Corp go up and down completely randomly.
Pair Corralation between Chevron Corp and Hexo Corp
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.2 times more return on investment than Hexo Corp. However, Chevron Corp is 4.89 times less risky than Hexo Corp. It trades about 0.01 of its potential returns per unit of risk. Hexo Corp is currently generating about -0.1 per unit of risk. If you would invest 16,287 in Chevron Corp on August 24, 2024 and sell it today you would lose (51.00) from holding Chevron Corp or give up 0.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 28.63% |
| Values | Daily Returns |
Chevron Corp vs. Hexo Corp
Performance |
| Timeline |
| Chevron Corp |
| Hexo Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and Hexo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Hexo Corp
The main advantage of trading using opposite Chevron Corp and Hexo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Hexo Corp 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 Hexo Corp will offset losses from the drop in Hexo Corp's long position.| Chevron Corp vs. Eshallgo Class A | Chevron Corp vs. Amtech Systems | Chevron Corp vs. Gold Fields Ltd | Chevron Corp vs. Aegean Airlines SA |
| Hexo Corp vs. Aurora Cannabis | Hexo Corp vs. Canopy Growth Corp | Hexo Corp vs. Curaleaf Holdings | Hexo Corp vs. OrganiGram Holdings |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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