Correlation Between Aerogrow International and Chevron Corp

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

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

Diversification Opportunities for Aerogrow International and Chevron Corp

0.0

Correlation Coefficient

Aerogrow International  Chevron Corp

Pay attention - limited upside

The 3 months correlation between Aerogrow and Chevron is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Aerogrow International and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Aerogrow International 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 Aerogrow International 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 Aerogrow International i.e., Aerogrow International and Chevron Corp go up and down completely randomly.

Pair Corralation between Aerogrow International and Chevron Corp

If you would invest  15,978  in Chevron Corp on February 2, 2024 and sell it today you would lose (15.00) from holding Chevron Corp or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Aerogrow International  vs.  Chevron Corp

Aerogrow International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aerogrow International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Aerogrow International is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Chevron Corp

Risk-Adjusted Performance

7 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Chevron Corp is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Aerogrow International and Chevron Corp

The main advantage of trading using opposite Aerogrow International and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerogrow International 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 Aerogrow International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.