Correlation Between Chevron Corp and Jackson Acquisition

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

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

Diversification Opportunities for Chevron Corp and Jackson Acquisition

0.92

Correlation Coefficient

Chevron Corp  Jackson Acquisition

Almost no diversification

The 3 months correlation between Chevron and Jackson is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Jackson Acquisition Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jackson Acquisition 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 Jackson Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jackson Acquisition has no effect on the direction of Chevron Corp i.e., Chevron Corp and Jackson Acquisition go up and down completely randomly.

Pair Corralation between Chevron Corp and Jackson Acquisition

If you would invest  13,919  in Chevron Corp on September 13, 2024 and sell it today you would earn a total of  1,702  from holding Chevron Corp or generate 12.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	1.59%
Values	Daily Returns

Chevron Corp  vs.  Jackson Acquisition Co

Chevron Corp

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Chevron Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jackson Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jackson Acquisition Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Jackson Acquisition is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chevron Corp and Jackson Acquisition

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

The idea behind Chevron Corp and Jackson Acquisition Co 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.