Correlation Between Chevron Corp and ETF Series
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and ETF Series 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 ETF Series into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and ETF Series Solutions, you can compare the effects of market volatilities on Chevron Corp and ETF Series 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 ETF Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and ETF Series.
Diversification Opportunities for Chevron Corp and ETF Series
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chevron and ETF is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and ETF Series Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ETF Series Solutions 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 ETF Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ETF Series Solutions has no effect on the direction of Chevron Corp i.e., Chevron Corp and ETF Series go up and down completely randomly.
Pair Corralation between Chevron Corp and ETF Series
Considering the 90-day investment horizon Chevron Corp is expected to under-perform the ETF Series. In addition to that, Chevron Corp is 2.0 times more volatile than ETF Series Solutions. It trades about -0.05 of its total potential returns per unit of risk. ETF Series Solutions is currently generating about 0.17 per unit of volatility. If you would invest 3,246 in ETF Series Solutions on March 11, 2025 and sell it today you would earn a total of 395.00 from holding ETF Series Solutions or generate 12.17% 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 vs. ETF Series Solutions
Performance |
| Timeline |
| Chevron Corp |
| ETF Series Solutions |
Chevron Corp and ETF Series Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chevron Corp and ETF Series
The main advantage of trading using opposite Chevron Corp and ETF Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, ETF Series 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 ETF Series will offset losses from the drop in ETF Series' long position.| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
| ETF Series vs. FT Vest Equity | ETF Series vs. Northern Lights | ETF Series vs. Dimensional International High | ETF Series vs. First Trust Exchange Traded |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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