Correlation Between Victory Supermarket and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Victory Supermarket 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 Victory Supermarket and Chevron Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Victory Supermarket Chain and Chevron Corp, you can compare the effects of market volatilities on Victory Supermarket 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 Victory Supermarket with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victory Supermarket and Chevron Corp.
Diversification Opportunities for Victory Supermarket and Chevron Corp
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Victory and Chevron is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Victory Supermarket Chain and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Victory Supermarket 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 Victory Supermarket Chain 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 Victory Supermarket i.e., Victory Supermarket and Chevron Corp go up and down completely randomly.
Pair Corralation between Victory Supermarket and Chevron Corp
Assuming the 90 days trading horizon Victory Supermarket Chain is expected to generate 1.92 times more return on investment than Chevron Corp. However, Victory Supermarket is 1.92 times more volatile than Chevron Corp. It trades about 0.29 of its potential returns per unit of risk. Chevron Corp is currently generating about 0.17 per unit of risk. If you would invest 375,256 in Victory Supermarket Chain on January 26, 2024 and sell it today you would earn a total of 110,944 from holding Victory Supermarket Chain or generate 29.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.42% |
| Values | Daily Returns |
Victory Supermarket Chain vs. Chevron Corp
Performance |
| Timeline |
| Victory Supermarket Chain |
| Chevron Corp |
Victory Supermarket and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Victory Supermarket and Chevron Corp
The main advantage of trading using opposite Victory Supermarket and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victory Supermarket 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.| Victory Supermarket vs. Bezeq Israeli Telecommunication | Victory Supermarket vs. Bank Hapoalim | Victory Supermarket vs. Bank Leumi Le Israel | Victory Supermarket vs. Israel Discount Bank |
| Chevron Corp vs. BP PLC ADR | Chevron Corp vs. Shell PLC ADR | Chevron Corp vs. Petroleo Brasileiro Petrobras | Chevron Corp vs. Suncor Energy |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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