Correlation Between Chevron Corp and GENERAL
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By analyzing existing cross correlation between Chevron Corp and GENERAL DYNAMICS PORATION, you can compare the effects of market volatilities on Chevron Corp and GENERAL 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 GENERAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and GENERAL.
Diversification Opportunities for Chevron Corp and GENERAL
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and GENERAL is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and GENERAL DYNAMICS PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GENERAL DYNAMICS PORATION 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 GENERAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GENERAL DYNAMICS PORATION has no effect on the direction of Chevron Corp i.e., Chevron Corp and GENERAL go up and down completely randomly.
Pair Corralation between Chevron Corp and GENERAL
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.2 times more return on investment than GENERAL. However, Chevron Corp is 2.2 times more volatile than GENERAL DYNAMICS PORATION. It trades about 0.33 of its potential returns per unit of risk. GENERAL DYNAMICS PORATION is currently generating about -0.16 per unit of risk. If you would invest 14,902 in Chevron Corp on August 29, 2024 and sell it today you would earn a total of 1,351 from holding Chevron Corp or generate 9.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. GENERAL DYNAMICS PORATION
Performance |
| Timeline |
| Chevron Corp |
| GENERAL DYNAMICS PORATION |
Chevron Corp and GENERAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and GENERAL
The main advantage of trading using opposite Chevron Corp and GENERAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, GENERAL 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 GENERAL will offset losses from the drop in GENERAL's long position.The idea behind Chevron Corp and GENERAL DYNAMICS PORATION 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.| GENERAL vs. The Coca Cola | GENERAL vs. JPMorgan Chase Co | GENERAL vs. Dupont De Nemours | GENERAL 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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