Correlation Between Chevron Corp and DIAGEO
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By analyzing existing cross correlation between Chevron Corp and DIAGEO CAPITAL PLC, you can compare the effects of market volatilities on Chevron Corp and DIAGEO 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 DIAGEO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and DIAGEO.
Diversification Opportunities for Chevron Corp and DIAGEO
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and DIAGEO is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and DIAGEO CAPITAL PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAGEO CAPITAL PLC 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 DIAGEO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAGEO CAPITAL PLC has no effect on the direction of Chevron Corp i.e., Chevron Corp and DIAGEO go up and down completely randomly.
Pair Corralation between Chevron Corp and DIAGEO
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.88 times more return on investment than DIAGEO. However, Chevron Corp is 1.13 times less risky than DIAGEO. It trades about 0.41 of its potential returns per unit of risk. DIAGEO CAPITAL PLC is currently generating about -0.28 per unit of risk. If you would invest 14,656 in Chevron Corp on August 31, 2024 and sell it today you would earn a total of 1,555 from holding Chevron Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
Chevron Corp vs. DIAGEO CAPITAL PLC
Performance |
| Timeline |
| Chevron Corp |
| DIAGEO CAPITAL PLC |
Chevron Corp and DIAGEO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and DIAGEO
The main advantage of trading using opposite Chevron Corp and DIAGEO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, DIAGEO 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 DIAGEO will offset losses from the drop in DIAGEO's long position.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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