Correlation Between Live Oak and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Bancshares and Chevron Corp, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Chevron Corp.
Diversification Opportunities for Live Oak and Chevron Corp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Live and Chevron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Bancshares and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Live Oak 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 Live Oak Bancshares 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 Live Oak i.e., Live Oak and Chevron Corp go up and down completely randomly.
Pair Corralation between Live Oak and Chevron Corp
If you would invest 14,070 in Chevron Corp on January 19, 2024 and sell it today you would earn a total of 1,570 from holding Chevron Corp or generate 11.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.61% |
| Values | Daily Returns |
Live Oak Bancshares vs. Chevron Corp
Performance |
| Timeline |
| Live Oak Bancshares |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Chevron Corp |
Live Oak and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Chevron Corp
The main advantage of trading using opposite Live Oak and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Community West Bancshares | Live Oak vs. First Financial Northwest | Live Oak vs. Home Bancorp | Live Oak vs. Home Federal Bancorp |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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