Correlation Between Chevron Corp and Revance Therapeutics,

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

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

Diversification Opportunities for Chevron Corp and Revance Therapeutics,

-0.54

Correlation Coefficient

Chevron Corp  Revance Therapeutics,

Excellent diversification

The 3 months correlation between Chevron and Revance is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Revance Therapeutics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Revance Therapeutics, 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 Revance Therapeutics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Revance Therapeutics, has no effect on the direction of Chevron Corp i.e., Chevron Corp and Revance Therapeutics, go up and down completely randomly.

Pair Corralation between Chevron Corp and Revance Therapeutics,

Considering the 90-day investment horizon Chevron Corp is expected to generate 2.56 times less return on investment than Revance Therapeutics,. But when comparing it to its historical volatility, Chevron Corp is 2.65 times less risky than Revance Therapeutics,. It trades about 0.21 of its potential returns per unit of risk. Revance Therapeutics, is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  306.00  in Revance Therapeutics, on December 29, 2024 and sell it today you would earn a total of  59.00  from holding Revance Therapeutics, or generate 19.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	44.26%
Values	Daily Returns

Chevron Corp  vs.  Revance Therapeutics,

Chevron Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chevron Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Revance Therapeutics,

Risk-Adjusted Performance

Good

Over the last 90 days Revance Therapeutics, has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady basic indicators, Revance Therapeutics, exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chevron Corp and Revance Therapeutics,

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

The idea behind Chevron Corp and Revance Therapeutics, 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.