This module allows you to analyze existing cross correlation between International Business Machines Corporation and Chevron Corporation. You can compare the effects of market volatilities on International Business 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 International Business with a short position of Chevron. See also your portfolio center
. Please also check ongoing floating volatility patterns of International Business
International Business Machine vs Chevron Corp.
Considering 30-days investment horizon, International Business Machines Corporation is expected to under-perform the Chevron. But the stock apears to be less risky and, when comparing its historical volatility, International Business Machines Corporation is 1.33 times less risky than Chevron. The stock trades about -0.41 of its potential returns per unit of risk. The Chevron Corporation is currently generating about -0.12 of returns per unit of risk over similar time horizon. If you would invest 11,820 in Chevron Corporation on October 19, 2017 and sell it today you would lose (349) from holding Chevron Corporation or give up 2.95% of portfolio value over 30 days.
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Very weak diversification
Overlapping area represents the amount of risk that can be diversified away by holding International Business Machine and Chevron Corp. in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Chevron and International Business 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 International Business Machines Corporation 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 International Business i.e. International Business and Chevron go up and down completely randomly.
Over the last 30 days International Business Machines Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.
Over the last 30 days Chevron Corporation has generated negative risk-adjusted returns adding no value to investors with long positions.