Correlation Between Chevron Corp and Horizon Bancorp
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Horizon Bancorp 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 Chevron Corp and Horizon Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Horizon Bancorp, you can compare the effects of market volatilities on Chevron Corp and Horizon Bancorp 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 Chevron Corp with a short position of Horizon Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Horizon Bancorp.
Diversification Opportunities for Chevron Corp and Horizon Bancorp
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chevron and Horizon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Horizon Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Horizon Bancorp and Chevron Corp 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 Chevron Corp are associated (or correlated) with Horizon Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Horizon Bancorp has no effect on the direction of Chevron Corp i.e., Chevron Corp and Horizon Bancorp go up and down completely randomly.
Pair Corralation between Chevron Corp and Horizon Bancorp
If you would invest 15,647 in Chevron Corp on January 24, 2024 and sell it today you would earn a total of 545.00 from holding Chevron Corp or generate 3.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
Chevron Corp vs. Horizon Bancorp
Performance |
Timeline |
Chevron Corp |
Horizon Bancorp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chevron Corp and Horizon Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chevron Corp and Horizon Bancorp
The main advantage of trading using opposite Chevron Corp and Horizon Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Horizon Bancorp 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 Horizon Bancorp will offset losses from the drop in Horizon Bancorp's long position.The idea behind Chevron Corp and Horizon Bancorp 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.Horizon Bancorp vs. KVH Industries | Horizon Bancorp vs. Tyson Foods | Horizon Bancorp vs. Where Food Comes | Horizon Bancorp vs. IPG Photonics |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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