Correlation Between Chevron Corp and BERKSHIRE
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By analyzing existing cross correlation between Chevron Corp and BERKSHIRE HATHAWAY ENERGY, you can compare the effects of market volatilities on Chevron Corp and BERKSHIRE 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 BERKSHIRE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and BERKSHIRE.
Diversification Opportunities for Chevron Corp and BERKSHIRE
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and BERKSHIRE is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and BERKSHIRE HATHAWAY ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BERKSHIRE HATHAWAY ENERGY 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 BERKSHIRE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BERKSHIRE HATHAWAY ENERGY has no effect on the direction of Chevron Corp i.e., Chevron Corp and BERKSHIRE go up and down completely randomly.
Pair Corralation between Chevron Corp and BERKSHIRE
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.5 times more return on investment than BERKSHIRE. However, Chevron Corp is 2.01 times less risky than BERKSHIRE. It trades about 0.3 of its potential returns per unit of risk. BERKSHIRE HATHAWAY ENERGY is currently generating about -0.14 per unit of risk. If you would invest 15,242 in Chevron Corp on September 3, 2024 and sell it today you would earn a total of 979.00 from holding Chevron Corp or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Chevron Corp vs. BERKSHIRE HATHAWAY ENERGY
Performance |
| Timeline |
| Chevron Corp |
| BERKSHIRE HATHAWAY ENERGY |
Chevron Corp and BERKSHIRE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and BERKSHIRE
The main advantage of trading using opposite Chevron Corp and BERKSHIRE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, BERKSHIRE 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 BERKSHIRE will offset losses from the drop in BERKSHIRE's long position.The idea behind Chevron Corp and BERKSHIRE HATHAWAY ENERGY 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.| BERKSHIRE vs. TFI International | BERKSHIRE vs. Eastman Kodak Co | BERKSHIRE vs. HE Equipment Services | BERKSHIRE vs. Global Ship Lease |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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