Correlation Between Chevron Corp and CONOCOPHILLIPS
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By analyzing existing cross correlation between Chevron Corp and CONOCOPHILLIPS 415 percent, you can compare the effects of market volatilities on Chevron Corp and CONOCOPHILLIPS 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 CONOCOPHILLIPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and CONOCOPHILLIPS.
Diversification Opportunities for Chevron Corp and CONOCOPHILLIPS
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and CONOCOPHILLIPS is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and CONOCOPHILLIPS 415 percent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CONOCOPHILLIPS 415 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 CONOCOPHILLIPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CONOCOPHILLIPS 415 has no effect on the direction of Chevron Corp i.e., Chevron Corp and CONOCOPHILLIPS go up and down completely randomly.
Pair Corralation between Chevron Corp and CONOCOPHILLIPS
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.78 times more return on investment than CONOCOPHILLIPS. However, Chevron Corp is 1.28 times less risky than CONOCOPHILLIPS. It trades about 0.29 of its potential returns per unit of risk. CONOCOPHILLIPS 415 percent is currently generating about -0.17 per unit of risk. If you would invest 14,902 in Chevron Corp on August 28, 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 | Weak |
| Accuracy | 77.27% |
| Values | Daily Returns |
Chevron Corp vs. CONOCOPHILLIPS 415 percent
Performance |
| Timeline |
| Chevron Corp |
| CONOCOPHILLIPS 415 |
Chevron Corp and CONOCOPHILLIPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and CONOCOPHILLIPS
The main advantage of trading using opposite Chevron Corp and CONOCOPHILLIPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, CONOCOPHILLIPS 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 CONOCOPHILLIPS will offset losses from the drop in CONOCOPHILLIPS's long position.The idea behind Chevron Corp and CONOCOPHILLIPS 415 percent 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.| CONOCOPHILLIPS vs. The Coca Cola | CONOCOPHILLIPS vs. JPMorgan Chase Co | CONOCOPHILLIPS vs. Dupont De Nemours | CONOCOPHILLIPS 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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