Correlation Between Chevron Corp and IShares
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and IShares 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 IShares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and IShares, you can compare the effects of market volatilities on Chevron Corp and IShares 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 IShares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and IShares.
Diversification Opportunities for Chevron Corp and IShares
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chevron and IShares is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and IShares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IShares 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 IShares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IShares has no effect on the direction of Chevron Corp i.e., Chevron Corp and IShares go up and down completely randomly.
Pair Corralation between Chevron Corp and IShares
If you would invest 15,152 in Chevron Corp on September 2, 2024 and sell it today you would earn a total of 1,041 from holding Chevron Corp or generate 6.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chevron Corp vs. IShares
Performance |
| Timeline |
| Chevron Corp |
| IShares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and IShares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and IShares
The main advantage of trading using opposite Chevron Corp and IShares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, IShares 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 IShares will offset losses from the drop in IShares' 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 |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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