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 generate 1.5 times more return on investment than Chevron. However, International Business is 1.5 times more volatile than Chevron Corporation. It trades about 0.24 of its potential returns per unit of risk. Chevron Corporation is currently generating about 0.24 per unit of risk. If you would invest 15,283 in International Business Machines Corporation on December 23, 2017 and sell it today you would earn a total of 954 from holding International Business Machines Corporation or generate 6.24% return on investment over 30 days.
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Very poor 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.
Compared to the overall equity markets, risk-adjusted returns on investments in International Business Machines Corporation are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days.
Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corporation are ranked lower than 15 (%) of all global equities and portfolios over the last 30 days.