Correlation Between CHEVRON CDR and Katipult Technology

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

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

Diversification Opportunities for CHEVRON CDR and Katipult Technology

-0.55

Correlation Coefficient

CHEVRON CDR  Katipult Technology

Excellent diversification

The 3 months correlation between CHEVRON and Katipult is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CHEVRON CDR and Katipult Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Katipult Technology Corp and CHEVRON CDR 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 CDR are associated (or correlated) with Katipult Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Katipult Technology Corp has no effect on the direction of CHEVRON CDR i.e., CHEVRON CDR and Katipult Technology go up and down completely randomly.

Pair Corralation between CHEVRON CDR and Katipult Technology

Assuming the 90 days trading horizon CHEVRON CDR is expected to generate 9.23 times less return on investment than Katipult Technology. But when comparing it to its historical volatility, CHEVRON CDR is 15.04 times less risky than Katipult Technology. It trades about 0.13 of its potential returns per unit of risk. Katipult Technology Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1.50  in Katipult Technology Corp on August 30, 2024 and sell it today you would earn a total of  0.00  from holding Katipult Technology Corp or generate 0.0% return on investment over 90 days.

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

CHEVRON CDR  vs.  Katipult Technology Corp

CHEVRON CDR

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CHEVRON CDR are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, CHEVRON CDR may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Katipult Technology Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Katipult Technology Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Katipult Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHEVRON CDR and Katipult Technology

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

The idea behind CHEVRON CDR and Katipult Technology 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..