Correlation Between Chevron Corp and MARSH
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By analyzing existing cross correlation between Chevron Corp and MARSH MCLENNAN INC, you can compare the effects of market volatilities on Chevron Corp and MARSH 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 MARSH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and MARSH.
Diversification Opportunities for Chevron Corp and MARSH
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chevron and MARSH is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and MARSH MCLENNAN INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MARSH MCLENNAN INC 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 MARSH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MARSH MCLENNAN INC has no effect on the direction of Chevron Corp i.e., Chevron Corp and MARSH go up and down completely randomly.
Pair Corralation between Chevron Corp and MARSH
Considering the 90-day investment horizon Chevron Corp is expected to generate 2.97 times less return on investment than MARSH. But when comparing it to its historical volatility, Chevron Corp is 2.22 times less risky than MARSH. It trades about 0.24 of its potential returns per unit of risk. MARSH MCLENNAN INC is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 7,932 in MARSH MCLENNAN INC on February 13, 2024 and sell it today you would earn a total of 891.00 from holding MARSH MCLENNAN INC or generate 11.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 71.43% |
Values | Daily Returns |
Chevron Corp vs. MARSH MCLENNAN INC
Performance |
Timeline |
Chevron Corp |
MARSH MCLENNAN INC |
Chevron Corp and MARSH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chevron Corp and MARSH
The main advantage of trading using opposite Chevron Corp and MARSH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, MARSH 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 MARSH will offset losses from the drop in MARSH's long position.Chevron Corp vs. Juniper Networks | Chevron Corp vs. Catalystprinceton Floating Rate | Chevron Corp vs. HP Inc | Chevron Corp vs. Zebra Technologies |
Check out your portfolio center.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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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