Correlation Between Chevron Corp and SYSCO

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

By analyzing existing cross correlation between Chevron Corp and SYSCO P 5375, you can compare the effects of market volatilities on Chevron Corp and SYSCO 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 SYSCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and SYSCO.

Diversification Opportunities for Chevron Corp and SYSCO

-0.48

Correlation Coefficient

Chevron Corp  SYSCO

Very good diversification

The 3 months correlation between Chevron and SYSCO is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and SYSCO P 5375 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SYSCO P 5375 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 SYSCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SYSCO P 5375 has no effect on the direction of Chevron Corp i.e., Chevron Corp and SYSCO go up and down completely randomly.

Pair Corralation between Chevron Corp and SYSCO

Considering the 90-day investment horizon Chevron Corp is expected to generate 0.99 times more return on investment than SYSCO. However, Chevron Corp is 1.01 times less risky than SYSCO. It trades about 0.15 of its potential returns per unit of risk. SYSCO P 5375 is currently generating about -0.14 per unit of risk. If you would invest  13,919  in Chevron Corp on September 13, 2024 and sell it today you would earn a total of  1,552  from holding Chevron Corp or generate 11.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	70.31%
Values	Daily Returns

Chevron Corp  vs.  SYSCO P 5375

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 inconsistent basic indicators, Chevron Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

SYSCO P 5375

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SYSCO P 5375 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for SYSCO P 5375 investors.

Pair Trading with Chevron Corp and SYSCO

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

The idea behind Chevron Corp and SYSCO P 5375 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.