Correlation Between Chevron Corp and WALMART
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By analyzing existing cross correlation between Chevron Corp and WALMART INC 265, you can compare the effects of market volatilities on Chevron Corp and WALMART 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 WALMART. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and WALMART.
Diversification Opportunities for Chevron Corp and WALMART
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and WALMART is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and WALMART INC 265 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WALMART INC 265 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 WALMART. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WALMART INC 265 has no effect on the direction of Chevron Corp i.e., Chevron Corp and WALMART go up and down completely randomly.
Pair Corralation between Chevron Corp and WALMART
If you would invest 13,883 in Chevron Corp on August 27, 2024 and sell it today you would earn a total of 2,353 from holding Chevron Corp or generate 16.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.77% |
| Values | Daily Returns |
Chevron Corp vs. WALMART INC 265
Performance |
| Timeline |
| Chevron Corp |
| WALMART INC 265 |
Chevron Corp and WALMART Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and WALMART
The main advantage of trading using opposite Chevron Corp and WALMART positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, WALMART 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 WALMART will offset losses from the drop in WALMART's long position.The idea behind Chevron Corp and WALMART INC 265 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.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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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