Correlation Between Chevron Corp and CrossingBridge Pre

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

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

Diversification Opportunities for Chevron Corp and CrossingBridge Pre

0.86

Correlation Coefficient

Chevron Corp  CrossingBridge Pre

Very poor diversification

The 3 months correlation between Chevron and CrossingBridge is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and CrossingBridge Pre Merger SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CrossingBridge Pre 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 CrossingBridge Pre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CrossingBridge Pre has no effect on the direction of Chevron Corp i.e., Chevron Corp and CrossingBridge Pre go up and down completely randomly.

Pair Corralation between Chevron Corp and CrossingBridge Pre

Considering the 90-day investment horizon Chevron Corp is expected to generate 10.64 times more return on investment than CrossingBridge Pre. However, Chevron Corp is 10.64 times more volatile than CrossingBridge Pre Merger SPAC. It trades about 0.14 of its potential returns per unit of risk. CrossingBridge Pre Merger SPAC is currently generating about 0.14 per unit of risk. If you would invest  14,646  in Chevron Corp on August 30, 2024 and sell it today you would earn a total of  1,565  from holding Chevron Corp or generate 10.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Chevron Corp  vs.  CrossingBridge Pre Merger SPAC

Chevron Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chevron Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

CrossingBridge Pre

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CrossingBridge Pre Merger SPAC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, CrossingBridge Pre is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Chevron Corp and CrossingBridge Pre

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

The idea behind Chevron Corp and CrossingBridge Pre Merger SPAC 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.