Correlation Between Chevron Corp and VERIZON
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By analyzing existing cross correlation between Chevron Corp and VERIZON MUNICATIONS INC, you can compare the effects of market volatilities on Chevron Corp and VERIZON 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 VERIZON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and VERIZON.
Diversification Opportunities for Chevron Corp and VERIZON
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and VERIZON is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and VERIZON MUNICATIONS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VERIZON MUNICATIONS INC 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 VERIZON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VERIZON MUNICATIONS INC has no effect on the direction of Chevron Corp i.e., Chevron Corp and VERIZON go up and down completely randomly.
Pair Corralation between Chevron Corp and VERIZON
Considering the 90-day investment horizon Chevron Corp is expected to generate 1.68 times more return on investment than VERIZON. However, Chevron Corp is 1.68 times more volatile than VERIZON MUNICATIONS INC. It trades about 0.36 of its potential returns per unit of risk. VERIZON MUNICATIONS INC is currently generating about 0.18 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 | 95.24% |
| Values | Daily Returns |
Chevron Corp vs. VERIZON MUNICATIONS INC
Performance |
| Timeline |
| Chevron Corp |
| VERIZON MUNICATIONS INC |
Chevron Corp and VERIZON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and VERIZON
The main advantage of trading using opposite Chevron Corp and VERIZON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, VERIZON 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 VERIZON will offset losses from the drop in VERIZON's long position.The idea behind Chevron Corp and VERIZON MUNICATIONS INC 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.| VERIZON vs. Jacobs Solutions | VERIZON vs. Bright Scholar Education | VERIZON vs. Acco Brands | VERIZON vs. Zane Interactive Publishing |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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