Correlation Between Chevron Corp and AMAZONCOM
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By analyzing existing cross correlation between Chevron Corp and AMAZONCOM INC, you can compare the effects of market volatilities on Chevron Corp and AMAZONCOM 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 AMAZONCOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and AMAZONCOM.
Diversification Opportunities for Chevron Corp and AMAZONCOM
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and AMAZONCOM is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and AMAZONCOM INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMAZONCOM INC 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 AMAZONCOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMAZONCOM INC has no effect on the direction of Chevron Corp i.e., Chevron Corp and AMAZONCOM go up and down completely randomly.
Pair Corralation between Chevron Corp and AMAZONCOM
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.98 times more return on investment than AMAZONCOM. However, Chevron Corp is 1.02 times less risky than AMAZONCOM. It trades about 0.29 of its potential returns per unit of risk. AMAZONCOM INC is currently generating about -0.24 per unit of risk. If you would invest 14,902 in Chevron Corp on August 27, 2024 and sell it today you would earn a total of 1,134 from holding Chevron Corp or generate 7.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. AMAZONCOM INC
Performance |
| Timeline |
| Chevron Corp |
| AMAZONCOM INC |
Chevron Corp and AMAZONCOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and AMAZONCOM
The main advantage of trading using opposite Chevron Corp and AMAZONCOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, AMAZONCOM 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 AMAZONCOM will offset losses from the drop in AMAZONCOM's long position.The idea behind Chevron Corp and AMAZONCOM INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AMAZONCOM vs. The Coca Cola | AMAZONCOM vs. JPMorgan Chase Co | AMAZONCOM vs. Dupont De Nemours | AMAZONCOM vs. Alcoa Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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