Correlation Between Chevron Corp and MOL PLC
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and MOL PLC 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 MOL PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and MOL PLC ADR, you can compare the effects of market volatilities on Chevron Corp and MOL PLC 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 MOL PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and MOL PLC.
Diversification Opportunities for Chevron Corp and MOL PLC
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and MOL is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and MOL PLC ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOL PLC ADR 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 MOL PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOL PLC ADR has no effect on the direction of Chevron Corp i.e., Chevron Corp and MOL PLC go up and down completely randomly.
Pair Corralation between Chevron Corp and MOL PLC
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.7 times more return on investment than MOL PLC. However, Chevron Corp is 1.43 times less risky than MOL PLC. It trades about 0.41 of its potential returns per unit of risk. MOL PLC ADR is currently generating about -0.01 per unit of risk. If you would invest 14,656 in Chevron Corp on August 31, 2024 and sell it today you would earn a total of 1,555 from holding Chevron Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. MOL PLC ADR
Performance |
| Timeline |
| Chevron Corp |
| MOL PLC ADR |
Chevron Corp and MOL PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and MOL PLC
The main advantage of trading using opposite Chevron Corp and MOL PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, MOL PLC 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 MOL PLC will offset losses from the drop in MOL PLC's long position.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
| MOL PLC vs. Equinor ASA ADR | MOL PLC vs. TotalEnergies SE ADR | MOL PLC vs. Ecopetrol SA ADR | MOL PLC vs. National Fuel Gas |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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