Correlation Between Chevron Corp and INTEL

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

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

Diversification Opportunities for Chevron Corp and INTEL

0.18

Correlation Coefficient

Chevron Corp  INTEL

Average diversification

The 3 months correlation between Chevron and INTEL is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and INTEL PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTEL PORATION 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 INTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTEL PORATION has no effect on the direction of Chevron Corp i.e., Chevron Corp and INTEL go up and down completely randomly.

Pair Corralation between Chevron Corp and INTEL

Considering the 90-day investment horizon Chevron Corp is expected to generate 1.01 times less return on investment than INTEL. But when comparing it to its historical volatility, Chevron Corp is 1.1 times less risky than INTEL. It trades about 0.03 of its potential returns per unit of risk. INTEL PORATION is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  8,292  in INTEL PORATION on October 8, 2024 and sell it today you would earn a total of  662.00  from holding INTEL PORATION or generate 7.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.96%
Values	Daily Returns

Chevron Corp  vs.  INTEL PORATION

Chevron Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chevron Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

INTEL PORATION

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in INTEL PORATION are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, INTEL may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chevron Corp and INTEL

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

The idea behind Chevron Corp and INTEL PORATION 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 CEOs Directory module to screen CEOs from public companies around the world.