Correlation Between Chevron Corp and Simplify Exchange

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

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

Diversification Opportunities for Chevron Corp and Simplify Exchange

0.81

Correlation Coefficient

Chevron Corp  Simplify Exchange

Very poor diversification

The 3 months correlation between Chevron and Simplify is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Simplify Exchange Traded in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simplify Exchange Traded 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 Simplify Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simplify Exchange Traded has no effect on the direction of Chevron Corp i.e., Chevron Corp and Simplify Exchange go up and down completely randomly.

Pair Corralation between Chevron Corp and Simplify Exchange

Considering the 90-day investment horizon Chevron Corp is expected to generate 5.78 times more return on investment than Simplify Exchange. However, Chevron Corp is 5.78 times more volatile than Simplify Exchange Traded. It trades about 0.15 of its potential returns per unit of risk. Simplify Exchange Traded is currently generating about 0.18 per unit of risk. If you would invest  13,682  in Chevron Corp on May 9, 2025 and sell it today you would earn a total of  1,596  from holding Chevron Corp or generate 11.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Chevron Corp  vs.  Simplify Exchange Traded

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 September 2025.

Simplify Exchange Traded

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simplify Exchange Traded are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong fundamental drivers, Simplify Exchange is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Chevron Corp and Simplify Exchange

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

The idea behind Chevron Corp and Simplify Exchange Traded 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.