Correlation Between Chevron Corp and MFS Active

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

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

Diversification Opportunities for Chevron Corp and MFS Active

0.72

Correlation Coefficient

Chevron Corp  MFS Active

Poor diversification

The 3 months correlation between Chevron and MFS is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and MFS Active International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MFS Active International 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 MFS Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MFS Active International has no effect on the direction of Chevron Corp i.e., Chevron Corp and MFS Active go up and down completely randomly.

Pair Corralation between Chevron Corp and MFS Active

Considering the 90-day investment horizon Chevron Corp is expected to generate 1.94 times more return on investment than MFS Active. However, Chevron Corp is 1.94 times more volatile than MFS Active International. It trades about 0.14 of its potential returns per unit of risk. MFS Active International is currently generating about 0.24 per unit of risk. If you would invest  13,565  in Chevron Corp on April 22, 2025 and sell it today you would earn a total of  1,439  from holding Chevron Corp or generate 10.61% 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.  MFS Active International

Chevron Corp

Risk-Adjusted Performance

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 weak basic indicators, Chevron Corp may actually be approaching a critical reversion point that can send shares even higher in August 2025.

MFS Active International

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in MFS Active International are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, MFS Active may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Chevron Corp and MFS Active

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

The idea behind Chevron Corp and MFS Active International 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.