Correlation Between Chevron Corp and Gabelli ETFs

Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Gabelli ETFs 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 Chevron Corp and Gabelli ETFs into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chevron Corp and Gabelli ETFs Trust, you can compare the effects of market volatilities on Chevron Corp and Gabelli ETFs 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 Gabelli ETFs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Gabelli ETFs.

Diversification Opportunities for Chevron Corp and Gabelli ETFs

0.76

Correlation Coefficient

Chevron Corp  Gabelli ETFs

Poor diversification

The 3 months correlation between Chevron and Gabelli is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Gabelli ETFs Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli ETFs Trust 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 Gabelli ETFs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli ETFs Trust has no effect on the direction of Chevron Corp i.e., Chevron Corp and Gabelli ETFs go up and down completely randomly.

Pair Corralation between Chevron Corp and Gabelli ETFs

Considering the 90-day investment horizon Chevron Corp is expected to generate 1.1 times more return on investment than Gabelli ETFs. However, Chevron Corp is 1.1 times more volatile than Gabelli ETFs Trust. It trades about 0.41 of its potential returns per unit of risk. Gabelli ETFs Trust is currently generating about 0.22 per unit of risk. If you would invest  14,398  in Chevron Corp on October 27, 2024 and sell it today you would earn a total of  1,167  from holding Chevron Corp or generate 8.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Chevron Corp  vs.  Gabelli ETFs Trust

Chevron Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Chevron Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gabelli ETFs Trust

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli ETFs Trust are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Gabelli ETFs is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Chevron Corp and Gabelli ETFs

The main advantage of trading using opposite Chevron Corp and Gabelli ETFs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Gabelli ETFs 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 Gabelli ETFs will offset losses from the drop in Gabelli ETFs' long position.

The idea behind Chevron Corp and Gabelli ETFs Trust 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.

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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 Anywhere module to track or share privately all of your investments from the convenience of any device.