Correlation Between Chevron Corp and LF Capital
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and LF Capital 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 LF Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and LF Capital Acquisition, you can compare the effects of market volatilities on Chevron Corp and LF Capital 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 LF Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and LF Capital.
Diversification Opportunities for Chevron Corp and LF Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and LFAC is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and LF Capital Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LF Capital Acquisition 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 LF Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LF Capital Acquisition has no effect on the direction of Chevron Corp i.e., Chevron Corp and LF Capital go up and down completely randomly.
Pair Corralation between Chevron Corp and LF Capital
If you would invest 14,578 in Chevron Corp on August 29, 2024 and sell it today you would earn a total of 1,780 from holding Chevron Corp or generate 12.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 2.33% |
| Values | Daily Returns |
Chevron Corp vs. LF Capital Acquisition
Performance |
| Timeline |
| Chevron Corp |
| LF Capital Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and LF Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and LF Capital
The main advantage of trading using opposite Chevron Corp and LF Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, LF Capital 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 LF Capital will offset losses from the drop in LF Capital's long position.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
| LF Capital vs. Swiftmerge Acquisition Corp | LF Capital vs. Latamgrowth SPAC Unit | LF Capital vs. TLGY Acquisition Corp | LF Capital vs. Qomolangma Acquisition 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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