Correlation Between Chevron Corp and Value Exchange

Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Value 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 Value 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 Value Exchange International, you can compare the effects of market volatilities on Chevron Corp and Value 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 Value Exchange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Value Exchange.

Diversification Opportunities for Chevron Corp and Value Exchange

-0.6

Correlation Coefficient

Chevron Corp  Value Exchange

Excellent diversification

The 3 months correlation between Chevron and Value is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Value Exchange International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Exchange Inter 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 Value Exchange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Exchange Inter has no effect on the direction of Chevron Corp i.e., Chevron Corp and Value Exchange go up and down completely randomly.

Pair Corralation between Chevron Corp and Value Exchange

Considering the 90-day investment horizon Chevron Corp is expected to generate 0.14 times more return on investment than Value Exchange. However, Chevron Corp is 6.96 times less risky than Value Exchange. It trades about 0.21 of its potential returns per unit of risk. Value Exchange International is currently generating about -0.06 per unit of risk. If you would invest  13,442  in Chevron Corp on April 30, 2025 and sell it today you would earn a total of  2,186  from holding Chevron Corp or generate 16.26% return on investment over 90 days.

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

Chevron Corp  vs.  Value Exchange 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 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Chevron Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Value Exchange Inter

Risk-Adjusted Performance

Very Weak

Over the last 90 days Value Exchange International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in August 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Chevron Corp and Value Exchange

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

The idea behind Chevron Corp and Value Exchange 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.