Correlation Between Chevron Corp and Teucrium Wheat

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

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

Diversification Opportunities for Chevron Corp and Teucrium Wheat

-0.73

Correlation Coefficient

Chevron Corp  Teucrium Wheat

Pay attention - limited upside

The 3 months correlation between Chevron and Teucrium is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Teucrium Wheat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teucrium Wheat 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 Teucrium Wheat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teucrium Wheat has no effect on the direction of Chevron Corp i.e., Chevron Corp and Teucrium Wheat go up and down completely randomly.

Pair Corralation between Chevron Corp and Teucrium Wheat

Considering the 90-day investment horizon Chevron Corp is expected to under-perform the Teucrium Wheat. In addition to that, Chevron Corp is 1.44 times more volatile than Teucrium Wheat. It trades about -0.31 of its total potential returns per unit of risk. Teucrium Wheat is currently generating about -0.13 per unit of volatility. If you would invest  493.00  in Teucrium Wheat on September 18, 2024 and sell it today you would lose (11.00) from holding Teucrium Wheat or give up 2.23% of portfolio value over 90 days.

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

Chevron Corp  vs.  Teucrium Wheat

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Teucrium Wheat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teucrium Wheat has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Etf's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the exchange-traded fund private investors.

Pair Trading with Chevron Corp and Teucrium Wheat

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

The idea behind Chevron Corp and Teucrium Wheat 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.