Correlation Between Chevron Corp and Qilian International
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Qilian International 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 Qilian International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Qilian International Holding, you can compare the effects of market volatilities on Chevron Corp and Qilian International 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 Qilian International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Qilian International.
Diversification Opportunities for Chevron Corp and Qilian International
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and Qilian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Qilian International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qilian International 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 Qilian International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qilian International has no effect on the direction of Chevron Corp i.e., Chevron Corp and Qilian International go up and down completely randomly.
Pair Corralation between Chevron Corp and Qilian International
Considering the 90-day investment horizon Chevron Corp is expected to generate 18.73 times less return on investment than Qilian International. But when comparing it to its historical volatility, Chevron Corp is 6.75 times less risky than Qilian International. It trades about 0.02 of its potential returns per unit of risk. Qilian International Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 405.00 in Qilian International Holding on August 31, 2024 and sell it today you would earn a total of 403.00 from holding Qilian International Holding or generate 99.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 86.63% |
| Values | Daily Returns |
Chevron Corp vs. Qilian International Holding
Performance |
| Timeline |
| Chevron Corp |
| Qilian International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and Qilian International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Qilian International
The main advantage of trading using opposite Chevron Corp and Qilian International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Qilian International 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 Qilian International will offset losses from the drop in Qilian International'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 |
| Qilian International vs. Painreform | Qilian International vs. Regencell Bioscience Holdings | Qilian International vs. Procaps Group SA | Qilian International vs. Phibro Animal Health |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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