Correlation Between Chevron Corp and SUMITOMO
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By analyzing existing cross correlation between Chevron Corp and SUMITOMO MITSUI FINL, you can compare the effects of market volatilities on Chevron Corp and SUMITOMO 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 SUMITOMO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and SUMITOMO.
Diversification Opportunities for Chevron Corp and SUMITOMO
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chevron and SUMITOMO is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and SUMITOMO MITSUI FINL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMITOMO MITSUI FINL 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 SUMITOMO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMITOMO MITSUI FINL has no effect on the direction of Chevron Corp i.e., Chevron Corp and SUMITOMO go up and down completely randomly.
Pair Corralation between Chevron Corp and SUMITOMO
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.3 times more return on investment than SUMITOMO. However, Chevron Corp is 2.3 times more volatile than SUMITOMO MITSUI FINL. It trades about 0.41 of its potential returns per unit of risk. SUMITOMO MITSUI FINL is currently generating about -0.17 per unit of risk. If you would invest 14,656 in Chevron Corp on August 31, 2024 and sell it today you would earn a total of 1,555 from holding Chevron Corp or generate 10.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Chevron Corp vs. SUMITOMO MITSUI FINL
Performance |
| Timeline |
| Chevron Corp |
| SUMITOMO MITSUI FINL |
Chevron Corp and SUMITOMO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and SUMITOMO
The main advantage of trading using opposite Chevron Corp and SUMITOMO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, SUMITOMO 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 SUMITOMO will offset losses from the drop in SUMITOMO's long position.| Chevron Corp vs. RLJ Lodging Trust | Chevron Corp vs. Aquagold International | Chevron Corp vs. Stepstone Group | Chevron Corp vs. Morningstar Unconstrained Allocation |
| SUMITOMO vs. Minerals Technologies | SUMITOMO vs. GMS Inc | SUMITOMO vs. AerSale Corp | SUMITOMO vs. EvoAir Holdings |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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