Correlation Between Chevron Corp and Vista Energy,

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

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

Diversification Opportunities for Chevron Corp and Vista Energy,

-0.5

Correlation Coefficient

Chevron Corp  Vista Energy,

Very good diversification

The 3 months correlation between Chevron and Vista is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp CEDEAR and Vista Energy, SAB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vista Energy, SAB 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 CEDEAR are associated (or correlated) with Vista Energy,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vista Energy, SAB has no effect on the direction of Chevron Corp i.e., Chevron Corp and Vista Energy, go up and down completely randomly.

Pair Corralation between Chevron Corp and Vista Energy,

Assuming the 90 days trading horizon Chevron Corp CEDEAR is expected to under-perform the Vista Energy,. But the stock apears to be less risky and, when comparing its historical volatility, Chevron Corp CEDEAR is 1.87 times less risky than Vista Energy,. The stock trades about -0.04 of its potential returns per unit of risk. The Vista Energy, SAB is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,640  in Vista Energy, SAB on September 15, 2024 and sell it today you would earn a total of  345.00  from holding Vista Energy, SAB or generate 21.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Chevron Corp CEDEAR  vs.  Vista Energy, SAB

Chevron Corp CEDEAR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chevron Corp CEDEAR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Chevron Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Vista Energy, SAB

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Vista Energy, SAB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Vista Energy, sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chevron Corp and Vista Energy,

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

The idea behind Chevron Corp CEDEAR and Vista Energy, SAB 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.

Check out your portfolio center.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.