Correlation Between KIN and Chevron Corp

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

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

Diversification Opportunities for KIN and Chevron Corp

-0.73

Correlation Coefficient

KIN  Chevron Corp

Pay attention - limited upside

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

Pair Corralation between KIN and Chevron Corp

Assuming the 90 days trading horizon KIN is expected to under-perform the Chevron Corp. In addition to that, KIN is 8.22 times more volatile than Chevron Corp. It trades about -0.14 of its total potential returns per unit of risk. Chevron Corp is currently generating about 0.21 per unit of volatility. If you would invest  14,150  in Chevron Corp on December 28, 2024 and sell it today you would earn a total of  2,515  from holding Chevron Corp or generate 17.77% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

KIN  vs.  Chevron Corp

KIN

Risk-Adjusted Performance

Very Weak

Over the last 90 days KIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for KIN shareholders.

Chevron Corp

Risk-Adjusted Performance

Good

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.

Pair Trading with KIN and Chevron Corp

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

The idea behind KIN and Chevron Corp 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.