Correlation Between Chevron Corp and SunPower
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and SunPower 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 SunPower into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and SunPower, you can compare the effects of market volatilities on Chevron Corp and SunPower 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 SunPower. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and SunPower.
Diversification Opportunities for Chevron Corp and SunPower
-0.87 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and SunPower is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and SunPower in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunPower 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 SunPower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunPower has no effect on the direction of Chevron Corp i.e., Chevron Corp and SunPower go up and down completely randomly.
Pair Corralation between Chevron Corp and SunPower
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 | Significant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Chevron Corp vs. SunPower
Performance |
| Timeline |
| Chevron Corp |
| SunPower |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and SunPower Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and SunPower
The main advantage of trading using opposite Chevron Corp and SunPower positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, SunPower 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 SunPower will offset losses from the drop in SunPower'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 |
| SunPower vs. Enphase Energy | SunPower vs. First Solar | SunPower vs. Sunnova Energy International | SunPower vs. SolarEdge Technologies |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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