Correlation Between Chevron Corp and Tema ETF
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Tema 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 Tema 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 Tema ETF Trust, you can compare the effects of market volatilities on Chevron Corp and Tema 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 Tema ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Tema ETF.
Diversification Opportunities for Chevron Corp and Tema ETF
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chevron and Tema is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Tema ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tema 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 Tema ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tema ETF Trust has no effect on the direction of Chevron Corp i.e., Chevron Corp and Tema ETF go up and down completely randomly.
Pair Corralation between Chevron Corp and Tema ETF
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.72 times more return on investment than Tema ETF. However, Chevron Corp is 1.39 times less risky than Tema ETF. It trades about 0.33 of its potential returns per unit of risk. Tema ETF Trust is currently generating about 0.19 per unit of risk. If you would invest 14,896 in Chevron Corp on August 24, 2024 and sell it today you would earn a total of 1,267 from holding Chevron Corp or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Tema ETF Trust
Performance |
| Timeline |
| Chevron Corp |
| Tema ETF Trust |
Chevron Corp and Tema ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Tema ETF
The main advantage of trading using opposite Chevron Corp and Tema ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Tema 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 Tema ETF will offset losses from the drop in Tema ETF's long position.| Chevron Corp vs. Exxon Mobil Corp | Chevron Corp vs. Small Cap Core | Chevron Corp vs. Freedom Holding Corp | Chevron Corp vs. Gfl Environmental Holdings |
| Tema ETF vs. Franklin Templeton ETF | Tema ETF vs. Tidal Trust II | Tema ETF vs. Tidal Trust II | Tema ETF vs. iShares Dividend and |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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