Correlation Between Chevron Corp and FEDEX
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By analyzing existing cross correlation between Chevron Corp and FEDEX P 42, you can compare the effects of market volatilities on Chevron Corp and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and FEDEX.
Diversification Opportunities for Chevron Corp and FEDEX
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and FEDEX is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and FEDEX P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 42 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P 42 has no effect on the direction of Chevron Corp i.e., Chevron Corp and FEDEX go up and down completely randomly.
Pair Corralation between Chevron Corp and FEDEX
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.3 times more return on investment than FEDEX. However, Chevron Corp is 1.3 times more volatile than FEDEX P 42. It trades about 0.02 of its potential returns per unit of risk. FEDEX P 42 is currently generating about 0.0 per unit of risk. If you would invest 14,851 in Chevron Corp on August 30, 2024 and sell it today you would earn a total of 1,360 from holding Chevron Corp or generate 9.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.12% |
| Values | Daily Returns |
Chevron Corp vs. FEDEX P 42
Performance |
| Timeline |
| Chevron Corp |
| FEDEX P 42 |
Chevron Corp and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and FEDEX
The main advantage of trading using opposite Chevron Corp and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX'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 |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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