Correlation Between Chevron Corp and Macquarie ETF
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Macquarie ETF 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 Macquarie ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Macquarie ETF Trust, you can compare the effects of market volatilities on Chevron Corp and Macquarie ETF 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 Macquarie ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Macquarie ETF.
Diversification Opportunities for Chevron Corp and Macquarie ETF
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chevron and Macquarie is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Macquarie ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie ETF Trust 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 Macquarie ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie ETF Trust has no effect on the direction of Chevron Corp i.e., Chevron Corp and Macquarie ETF go up and down completely randomly.
Pair Corralation between Chevron Corp and Macquarie ETF
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.54 times less return on investment than Macquarie ETF. But when comparing it to its historical volatility, Chevron Corp is 1.12 times less risky than Macquarie ETF. It trades about 0.02 of its potential returns per unit of risk. Macquarie ETF Trust is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,494 in Macquarie ETF Trust on August 31, 2024 and sell it today you would earn a total of 436.90 from holding Macquarie ETF Trust or generate 17.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 67.65% |
| Values | Daily Returns |
Chevron Corp vs. Macquarie ETF Trust
Performance |
| Timeline |
| Chevron Corp |
| Macquarie ETF Trust |
Chevron Corp and Macquarie ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Macquarie ETF
The main advantage of trading using opposite Chevron Corp and Macquarie ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Macquarie ETF 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 Macquarie ETF will offset losses from the drop in Macquarie ETF'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 |
| Macquarie ETF vs. Freedom Day Dividend | Macquarie ETF vs. iShares MSCI China | Macquarie ETF vs. iShares Dividend and | Macquarie ETF vs. SmartETFs Dividend Builder |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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