Correlation Between Chevron Corp and Blue Sphere

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

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

Diversification Opportunities for Chevron Corp and Blue Sphere

-0.26

Correlation Coefficient

Chevron Corp  Blue Sphere

Very good diversification

The 3 months correlation between Chevron and Blue is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Blue Sphere Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Sphere Corp 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 Blue Sphere. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Sphere Corp has no effect on the direction of Chevron Corp i.e., Chevron Corp and Blue Sphere go up and down completely randomly.

Pair Corralation between Chevron Corp and Blue Sphere

Considering the 90-day investment horizon Chevron Corp is expected to generate 572.5 times less return on investment than Blue Sphere. But when comparing it to its historical volatility, Chevron Corp is 290.09 times less risky than Blue Sphere. It trades about 0.17 of its potential returns per unit of risk. Blue Sphere Corp is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  0.00  in Blue Sphere Corp on June 29, 2025 and sell it today you would earn a total of  0.01  from holding Blue Sphere Corp or generate 9.223372036854776E16% return on investment over 90 days.

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

Chevron Corp  vs.  Blue Sphere Corp

Chevron Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Chevron Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Blue Sphere Corp

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Blue Sphere Corp are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Blue Sphere reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chevron Corp and Blue Sphere

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

The idea behind Chevron Corp and Blue Sphere Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.