Correlation Between Chevron Corp and SPDR DoubleLine
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and SPDR DoubleLine 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 SPDR DoubleLine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and SPDR DoubleLine Total, you can compare the effects of market volatilities on Chevron Corp and SPDR DoubleLine 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 SPDR DoubleLine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and SPDR DoubleLine.
Diversification Opportunities for Chevron Corp and SPDR DoubleLine
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and SPDR is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and SPDR DoubleLine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR DoubleLine Total 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 SPDR DoubleLine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR DoubleLine Total has no effect on the direction of Chevron Corp i.e., Chevron Corp and SPDR DoubleLine go up and down completely randomly.
Pair Corralation between Chevron Corp and SPDR DoubleLine
Considering the 90-day investment horizon Chevron Corp is expected to generate 3.33 times more return on investment than SPDR DoubleLine. However, Chevron Corp is 3.33 times more volatile than SPDR DoubleLine Total. It trades about 0.38 of its potential returns per unit of risk. SPDR DoubleLine Total is currently generating about 0.09 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 | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. SPDR DoubleLine Total
Performance |
| Timeline |
| Chevron Corp |
| SPDR DoubleLine Total |
Chevron Corp and SPDR DoubleLine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and SPDR DoubleLine
The main advantage of trading using opposite Chevron Corp and SPDR DoubleLine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, SPDR DoubleLine 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 SPDR DoubleLine will offset losses from the drop in SPDR DoubleLine'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 |
| SPDR DoubleLine vs. PIMCO Active Bond | SPDR DoubleLine vs. SPDR Blackstone Senior | SPDR DoubleLine vs. SPDR Barclays Intermediate | SPDR DoubleLine vs. SPDR Bloomberg Investment |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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