Correlation Between Zebra Technologies and Chevron

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

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

Diversification Opportunities for Zebra Technologies and Chevron

0.0

Correlation Coefficient

Zebra Technologies  Chevron

Pay attention - limited upside

The 3 months correlation between Zebra and Chevron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zebra Technologies and Chevron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron and Zebra Technologies 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 Zebra Technologies are associated (or correlated) with Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of Zebra Technologies i.e., Zebra Technologies and Chevron go up and down completely randomly.

Pair Corralation between Zebra Technologies and Chevron

Assuming the 90 days trading horizon Zebra Technologies is expected to under-perform the Chevron. In addition to that, Zebra Technologies is 1.75 times more volatile than Chevron. It trades about -0.19 of its total potential returns per unit of risk. Chevron is currently generating about 0.07 per unit of volatility. If you would invest  8,842  in Chevron on December 24, 2024 and sell it today you would earn a total of  554.00  from holding Chevron or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Zebra Technologies  vs.  Chevron

Zebra Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zebra Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Chevron

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chevron may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Zebra Technologies and Chevron

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

The idea behind Zebra Technologies and Chevron 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.