Correlation Between CHEVRON and Highway Holdings
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By analyzing existing cross correlation between CHEVRON USA INC and Highway Holdings Limited, you can compare the effects of market volatilities on CHEVRON and Highway Holdings 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 with a short position of Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHEVRON and Highway Holdings.
Diversification Opportunities for CHEVRON and Highway Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CHEVRON and Highway is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding CHEVRON USA INC and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings and CHEVRON 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 USA INC are associated (or correlated) with Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of CHEVRON i.e., CHEVRON and Highway Holdings go up and down completely randomly.
Pair Corralation between CHEVRON and Highway Holdings
Assuming the 90 days trading horizon CHEVRON USA INC is expected to generate 0.62 times more return on investment than Highway Holdings. However, CHEVRON USA INC is 1.6 times less risky than Highway Holdings. It trades about 0.02 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about -0.14 per unit of risk. If you would invest 10,041 in CHEVRON USA INC on September 13, 2024 and sell it today you would earn a total of 33.00 from holding CHEVRON USA INC or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.91% |
| Values | Daily Returns |
CHEVRON USA INC vs. Highway Holdings Limited
Performance |
| Timeline |
| CHEVRON USA INC |
| Highway Holdings |
CHEVRON and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHEVRON and Highway Holdings
The main advantage of trading using opposite CHEVRON and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEVRON position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| CHEVRON vs. SkyWest | CHEVRON vs. Alaska Air Group | CHEVRON vs. Golden Matrix Group | CHEVRON vs. Delta Air Lines |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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