Correlation Between Chevron Corp and COLGATE
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By analyzing existing cross correlation between Chevron Corp and COLGATE PALMOLIVE MEDIUM TERM, you can compare the effects of market volatilities on Chevron Corp and COLGATE 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 COLGATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and COLGATE.
Diversification Opportunities for Chevron Corp and COLGATE
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and COLGATE is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and COLGATE PALMOLIVE MEDIUM TERM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COLGATE PALMOLIVE 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 COLGATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COLGATE PALMOLIVE has no effect on the direction of Chevron Corp i.e., Chevron Corp and COLGATE go up and down completely randomly.
Pair Corralation between Chevron Corp and COLGATE
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.18 times more return on investment than COLGATE. However, Chevron Corp is 1.18 times more volatile than COLGATE PALMOLIVE MEDIUM TERM. It trades about 0.06 of its potential returns per unit of risk. COLGATE PALMOLIVE MEDIUM TERM is currently generating about -0.01 per unit of risk. If you would invest 13,654 in Chevron Corp on September 2, 2024 and sell it today you would earn a total of 2,539 from holding Chevron Corp or generate 18.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 75.0% |
| Values | Daily Returns |
Chevron Corp vs. COLGATE PALMOLIVE MEDIUM TERM
Performance |
| Timeline |
| Chevron Corp |
| COLGATE PALMOLIVE |
Chevron Corp and COLGATE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and COLGATE
The main advantage of trading using opposite Chevron Corp and COLGATE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, COLGATE 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 COLGATE will offset losses from the drop in COLGATE'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 |
| COLGATE vs. Where Food Comes | COLGATE vs. BBB Foods | COLGATE vs. FitLife Brands, Common | COLGATE vs. Grupo Televisa SAB |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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