Correlation Between Knife River and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Knife River and Chevron Corp at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Knife River and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Knife River and Chevron Corp, you can compare the effects of market volatilities on Knife River and Chevron Corp 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 Knife River with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Knife River and Chevron Corp.
Diversification Opportunities for Knife River and Chevron Corp
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Knife and Chevron is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Knife River and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Knife River 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 Knife River are associated (or correlated) with Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Knife River i.e., Knife River and Chevron Corp go up and down completely randomly.
Pair Corralation between Knife River and Chevron Corp
Considering the 90-day investment horizon Knife River is expected to generate 1.44 times more return on investment than Chevron Corp. However, Knife River is 1.44 times more volatile than Chevron Corp. It trades about -0.05 of its potential returns per unit of risk. Chevron Corp is currently generating about -0.08 per unit of risk. If you would invest 10,488 in Knife River on November 18, 2024 and sell it today you would lose (283.00) from holding Knife River or give up 2.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Knife River vs. Chevron Corp
Performance |
| Timeline |
| Knife River |
| Chevron Corp |
Knife River and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Knife River and Chevron Corp
The main advantage of trading using opposite Knife River and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Knife River position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.| Knife River vs. Academy Sports Outdoors | Knife River vs. Lithia Motors | Knife River vs. Cedar Realty Trust | Knife River vs. Aegon NV ADR |
| Chevron Corp vs. TotalEnergies SE ADR | Chevron Corp vs. Equinor ASA ADR | Chevron Corp vs. Petrleo Brasileiro SA | Chevron Corp vs. Ecopetrol SA 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |