Correlation Between Chevron Corp and ENBRIDGE
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By analyzing existing cross correlation between Chevron Corp and ENBRIDGE INC 55, you can compare the effects of market volatilities on Chevron Corp and ENBRIDGE 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 ENBRIDGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and ENBRIDGE.
Diversification Opportunities for Chevron Corp and ENBRIDGE
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chevron and ENBRIDGE is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and ENBRIDGE INC 55 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENBRIDGE INC 55 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 ENBRIDGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENBRIDGE INC 55 has no effect on the direction of Chevron Corp i.e., Chevron Corp and ENBRIDGE go up and down completely randomly.
Pair Corralation between Chevron Corp and ENBRIDGE
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.76 times less return on investment than ENBRIDGE. In addition to that, Chevron Corp is 3.79 times more volatile than ENBRIDGE INC 55. It trades about 0.07 of its total potential returns per unit of risk. ENBRIDGE INC 55 is currently generating about 0.47 per unit of volatility. If you would invest 9,490 in ENBRIDGE INC 55 on November 25, 2024 and sell it today you would earn a total of 170.00 from holding ENBRIDGE INC 55 or generate 1.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 47.62% |
Values | Daily Returns |
Chevron Corp vs. ENBRIDGE INC 55
Performance |
Timeline |
Chevron Corp |
ENBRIDGE INC 55 |
Chevron Corp and ENBRIDGE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chevron Corp and ENBRIDGE
The main advantage of trading using opposite Chevron Corp and ENBRIDGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, ENBRIDGE 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 ENBRIDGE will offset losses from the drop in ENBRIDGE's long position.Chevron Corp vs. BP PLC ADR | ||
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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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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