Correlation Between Chevron Corp and Formidable Fortress

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

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

Diversification Opportunities for Chevron Corp and Formidable Fortress

0.76

Correlation Coefficient

Chevron Corp  Formidable Fortress

Poor diversification

The 3 months correlation between Chevron and Formidable is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Formidable Fortress ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable Fortress ETF 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 Formidable Fortress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable Fortress ETF has no effect on the direction of Chevron Corp i.e., Chevron Corp and Formidable Fortress go up and down completely randomly.

Pair Corralation between Chevron Corp and Formidable Fortress

Considering the 90-day investment horizon Chevron Corp is expected to generate 1.77 times more return on investment than Formidable Fortress. However, Chevron Corp is 1.77 times more volatile than Formidable Fortress ETF. It trades about 0.16 of its potential returns per unit of risk. Formidable Fortress ETF is currently generating about 0.12 per unit of risk. If you would invest  13,683  in Chevron Corp on May 2, 2025 and sell it today you would earn a total of  1,673  from holding Chevron Corp or generate 12.23% 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.  Formidable Fortress ETF

Chevron Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 12 (%) 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.

Formidable Fortress ETF

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Formidable Fortress ETF are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Formidable Fortress is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Chevron Corp and Formidable Fortress

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

The idea behind Chevron Corp and Formidable Fortress ETF 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..