Correlation Between Chevron Corp and Jacob Forward
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Jacob Forward 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 Jacob Forward into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Jacob Forward ETF, you can compare the effects of market volatilities on Chevron Corp and Jacob Forward 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 Jacob Forward. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Jacob Forward.
Diversification Opportunities for Chevron Corp and Jacob Forward
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and Jacob is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Jacob Forward ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacob Forward ETF 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 Jacob Forward. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacob Forward ETF has no effect on the direction of Chevron Corp i.e., Chevron Corp and Jacob Forward go up and down completely randomly.
Pair Corralation between Chevron Corp and Jacob Forward
Considering the 90-day investment horizon Chevron Corp is expected to generate 4.55 times less return on investment than Jacob Forward. But when comparing it to its historical volatility, Chevron Corp is 1.68 times less risky than Jacob Forward. It trades about 0.04 of its potential returns per unit of risk. Jacob Forward ETF is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 992.00 in Jacob Forward ETF on September 1, 2024 and sell it today you would earn a total of 273.00 from holding Jacob Forward ETF or generate 27.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Chevron Corp vs. Jacob Forward ETF
Performance |
| Timeline |
| Chevron Corp |
| Jacob Forward ETF |
Chevron Corp and Jacob Forward Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Jacob Forward
The main advantage of trading using opposite Chevron Corp and Jacob Forward positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Jacob Forward 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 Jacob Forward will offset losses from the drop in Jacob Forward'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 |
| Jacob Forward vs. iShares SP Mid Cap | Jacob Forward vs. iShares SP Small Cap | Jacob Forward vs. iShares SP Mid Cap | Jacob Forward vs. iShares SP 500 |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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