This module allows you to analyze existing cross correlation between Chevron Corporation and Sprint Corporation. You can compare the effects of market volatilities on Chevron and Sprint 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 with a short position of Sprint. See also your portfolio center. Please also check ongoing floating volatility patterns of Chevron and Sprint.
Considering 30-days investment horizon, Chevron Corporation is expected to under-perform the Sprint. But the stock apears to be less risky and, when comparing its historical volatility, Chevron Corporation is 2.03 times less risky than Sprint. The stock trades about -0.13 of its potential returns per unit of risk. The Sprint Corporation is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 546.00 in Sprint Corporation on July 20, 2018 and sell it today you would earn a total of 67.00 from holding Sprint Corporation or generate 12.27% return on investment over 30 days.
Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp. and Sprint Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Sprint and Chevron 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 Corporation are associated (or correlated) with Sprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprint has no effect on the direction of Chevron i.e. Chevron and Sprint go up and down completely randomly.
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