Correlation Between Cabot Oil and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Cabot Oil and Chevron Corp 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 Cabot Oil and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cabot Oil Gas and Chevron Corp, you can compare the effects of market volatilities on Cabot Oil and Chevron Corp 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 Cabot Oil with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cabot Oil and Chevron Corp.
Diversification Opportunities for Cabot Oil and Chevron Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Cabot and Chevron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cabot Oil Gas and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Cabot Oil 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 Cabot Oil Gas are associated (or correlated) with Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Cabot Oil i.e., Cabot Oil and Chevron Corp go up and down completely randomly.
Pair Corralation between Cabot Oil and Chevron Corp
If you would invest 16,156 in Chevron Corp on February 6, 2024 and sell it today you would lose (131.00) from holding Chevron Corp or give up 0.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Cabot Oil Gas vs. Chevron Corp
Performance |
| Timeline |
| Cabot Oil Gas |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chevron Corp |
Cabot Oil and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cabot Oil and Chevron Corp
The main advantage of trading using opposite Cabot Oil and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cabot Oil position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.| Cabot Oil vs. Blue Owl Capital | Cabot Oil vs. Stepstone Group | Cabot Oil vs. SEI Investments | Cabot Oil vs. Waste Management |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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