Correlation Between Chevron Corp and Murphy
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By analyzing existing cross correlation between Chevron Corp and Murphy Oil Corp, you can compare the effects of market volatilities on Chevron Corp and Murphy 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 Murphy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Murphy.
Diversification Opportunities for Chevron Corp and Murphy
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and Murphy is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Murphy Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Murphy Oil Corp 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 Murphy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Murphy Oil Corp has no effect on the direction of Chevron Corp i.e., Chevron Corp and Murphy go up and down completely randomly.
Pair Corralation between Chevron Corp and Murphy
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.31 times more return on investment than Murphy. However, Chevron Corp is 1.31 times more volatile than Murphy Oil Corp. It trades about 0.36 of its potential returns per unit of risk. Murphy Oil Corp is currently generating about -0.1 per unit of risk. If you would invest 14,902 in Chevron Corp on August 27, 2024 and sell it today you would earn a total of 1,334 from holding Chevron Corp or generate 8.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chevron Corp vs. Murphy Oil Corp
Performance |
| Timeline |
| Chevron Corp |
| Murphy Oil Corp |
Chevron Corp and Murphy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and Murphy
The main advantage of trading using opposite Chevron Corp and Murphy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Murphy 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 Murphy will offset losses from the drop in Murphy's long position.The idea behind Chevron Corp and Murphy Oil Corp 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.| Murphy vs. The Coca Cola | Murphy vs. JPMorgan Chase Co | Murphy vs. Dupont De Nemours | Murphy 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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