Correlation Between Chevron Corp and Amarc Resources

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

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

Diversification Opportunities for Chevron Corp and Amarc Resources

0.79

Correlation Coefficient

Chevron Corp  Amarc Resources

Poor diversification

The 3 months correlation between Chevron and Amarc is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Amarc Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amarc Resources 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 Amarc Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amarc Resources has no effect on the direction of Chevron Corp i.e., Chevron Corp and Amarc Resources go up and down completely randomly.

Pair Corralation between Chevron Corp and Amarc Resources

Considering the 90-day investment horizon Chevron Corp is expected to generate 3.38 times less return on investment than Amarc Resources. But when comparing it to its historical volatility, Chevron Corp is 3.16 times less risky than Amarc Resources. It trades about 0.15 of its potential returns per unit of risk. Amarc Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  36.00  in Amarc Resources on April 28, 2025 and sell it today you would earn a total of  15.00  from holding Amarc Resources or generate 41.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Chevron Corp  vs.  Amarc Resources

Chevron Corp

Risk-Adjusted Performance

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 August 2025.

Amarc Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Amarc Resources are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Amarc Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chevron Corp and Amarc Resources

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

The idea behind Chevron Corp and Amarc Resources 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.