Correlation Between Chevron Corp and ProShares Short
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and ProShares Short 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 ProShares Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and ProShares Short SmallCap600, you can compare the effects of market volatilities on Chevron Corp and ProShares Short 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 ProShares Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and ProShares Short.
Diversification Opportunities for Chevron Corp and ProShares Short
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and ProShares is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and ProShares Short SmallCap600 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Short Smal 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 ProShares Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Short Smal has no effect on the direction of Chevron Corp i.e., Chevron Corp and ProShares Short go up and down completely randomly.
Pair Corralation between Chevron Corp and ProShares Short
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.64 times more return on investment than ProShares Short. However, Chevron Corp is 1.56 times less risky than ProShares Short. It trades about 0.38 of its potential returns per unit of risk. ProShares Short SmallCap600 is currently generating about -0.22 per unit of risk. If you would invest 14,702 in Chevron Corp on August 30, 2024 and sell it today you would earn a total of 1,509 from holding Chevron Corp or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chevron Corp vs. ProShares Short SmallCap600
Performance |
| Timeline |
| Chevron Corp |
| ProShares Short Smal |
Chevron Corp and ProShares Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and ProShares Short
The main advantage of trading using opposite Chevron Corp and ProShares Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, ProShares Short 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 ProShares Short will offset losses from the drop in ProShares Short'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 |
| ProShares Short vs. ProShares Short MidCap400 | ProShares Short vs. ProShares UltraShort SmallCap600 | ProShares Short vs. ProShares UltraShort MidCap400 | ProShares Short vs. ProShares UltraShort 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stocks Directory Find actively traded stocks across global markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |