Correlation Between Tutor Perini and Chevron Corp

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

By analyzing existing cross correlation between Tutor Perini and Chevron Corp, you can compare the effects of market volatilities on Tutor Perini and Chevron Corp 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 Tutor Perini with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tutor Perini and Chevron Corp.

Diversification Opportunities for Tutor Perini and Chevron Corp

0.72

Correlation Coefficient

Tutor Perini  Chevron Corp

Poor diversification

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

Pair Corralation between Tutor Perini and Chevron Corp

Considering the 90-day investment horizon Tutor Perini is expected to generate 1.87 times more return on investment than Chevron Corp. However, Tutor Perini is 1.87 times more volatile than Chevron Corp. It trades about 0.33 of its potential returns per unit of risk. Chevron Corp is currently generating about 0.16 per unit of risk. If you would invest  2,987  in Tutor Perini on May 8, 2025 and sell it today you would earn a total of  1,741  from holding Tutor Perini or generate 58.29% return on investment over 90 days.

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

Tutor Perini  vs.  Chevron Corp

Tutor Perini

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Tutor Perini exhibited solid returns over the last few months and may actually be approaching a breakup point.

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 showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tutor Perini and Chevron Corp

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

The idea behind Tutor Perini and Chevron Corp 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.