Correlation Between Chevron Corp and Cellebrite

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

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

Diversification Opportunities for Chevron Corp and Cellebrite

0.69

Correlation Coefficient

Chevron Corp  Cellebrite

Poor diversification

The 3 months correlation between Chevron and Cellebrite is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Cellebrite DI Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellebrite DI Equity 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 Cellebrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellebrite DI Equity has no effect on the direction of Chevron Corp i.e., Chevron Corp and Cellebrite go up and down completely randomly.

Pair Corralation between Chevron Corp and Cellebrite

Considering the 90-day investment horizon Chevron Corp is expected to under-perform the Cellebrite. But the stock apears to be less risky and, when comparing its historical volatility, Chevron Corp is 4.54 times less risky than Cellebrite. The stock trades about 0.0 of its potential returns per unit of risk. The Cellebrite DI Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  65.00  in Cellebrite DI Equity on August 9, 2024 and sell it today you would earn a total of  450.00  from holding Cellebrite DI Equity or generate 692.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	83.2%
Values	Daily Returns

Chevron Corp  vs.  Cellebrite DI Equity

Chevron Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, Chevron Corp may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Cellebrite DI Equity

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days Cellebrite DI Equity has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly unfluctuating basic indicators, Cellebrite showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chevron Corp and Cellebrite

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

The idea behind Chevron Corp and Cellebrite DI Equity 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.