Correlation Between Chevron Corp and LOWES
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By analyzing existing cross correlation between Chevron Corp and LOWES INC 37, you can compare the effects of market volatilities on Chevron Corp and LOWES 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 LOWES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and LOWES.
Diversification Opportunities for Chevron Corp and LOWES
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and LOWES is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and LOWES INC 37 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOWES INC 37 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 LOWES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOWES INC 37 has no effect on the direction of Chevron Corp i.e., Chevron Corp and LOWES go up and down completely randomly.
Pair Corralation between Chevron Corp and LOWES
Considering the 90-day investment horizon Chevron Corp is expected to generate 0.99 times more return on investment than LOWES. However, Chevron Corp is 1.01 times less risky than LOWES. It trades about 0.29 of its potential returns per unit of risk. LOWES INC 37 is currently generating about -0.05 per unit of risk. If you would invest 15,242 in Chevron Corp on September 4, 2024 and sell it today you would earn a total of 979.00 from holding Chevron Corp or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Chevron Corp vs. LOWES INC 37
Performance |
| Timeline |
| Chevron Corp |
| LOWES INC 37 |
Chevron Corp and LOWES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and LOWES
The main advantage of trading using opposite Chevron Corp and LOWES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, LOWES 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 LOWES will offset losses from the drop in LOWES's long position.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. TotalEnergies SE ADR | Chevron Corp vs. Equinor ASA ADR |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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