Correlation Between Chevron Corp and PBAXW Old

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

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

Diversification Opportunities for Chevron Corp and PBAXW Old

0.0

Correlation Coefficient

Chevron Corp  PBAXW Old

Pay attention - limited upside

The 3 months correlation between Chevron and PBAXW is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and PBAXW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PBAXW Old 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 PBAXW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PBAXW Old has no effect on the direction of Chevron Corp i.e., Chevron Corp and PBAXW Old go up and down completely randomly.

Pair Corralation between Chevron Corp and PBAXW Old

If you would invest  14,297  in Chevron Corp on October 24, 2024 and sell it today you would earn a total of  1,344  from holding Chevron Corp or generate 9.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

Chevron Corp  vs.  PBAXW Old

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.

PBAXW Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PBAXW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, PBAXW Old is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Chevron Corp and PBAXW Old

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

The idea behind Chevron Corp and PBAXW Old 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.