This module allows you to analyze existing cross correlation between Facebook and Chevron Corporation. You can compare the effects of market volatilities on Facebook and Chevron 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 Facebook with a short position of Chevron. See also your portfolio center. Please also check ongoing floating volatility patterns of Facebook and Chevron.
|Horizon||30 Days Login to change|
Over the last 30 days Facebook has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Facebook is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short term losses for the investors.
Over the last 30 days Chevron Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Inspite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Facebook and Chevron Volatility Contrast
Predicted Return Density
Facebook Inc vs. Chevron Corp.
Allowing for the 30-days total investment horizon, Facebook is expected to generate 1.43 times more return on investment than Chevron. However, Facebook is 1.43 times more volatile than Chevron Corporation. It trades about -0.03 of its potential returns per unit of risk. Chevron Corporation is currently generating about -0.12 per unit of risk. If you would invest 18,884 in Facebook on July 25, 2019 and sell it today you would lose (503.00) from holding Facebook or give up 2.66% of portfolio value over 30 days.
Pair Corralation between Facebook and Chevron
|Time Period||2 Months [change]|
Diversification Opportunities for Facebook and Chevron
Very poor diversification
Overlapping area represents the amount of risk that can be diversified away by holding Facebook Inc and Chevron Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Chevron and Facebook 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 Facebook are associated (or correlated) with Chevron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron has no effect on the direction of Facebook i.e. Facebook and Chevron go up and down completely randomly.
See also your portfolio center. Please also try Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.