Correlation Between Chevron Corp and Alfi

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Alfi 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 Alfi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chevron Corp and Alfi Inc, you can compare the effects of market volatilities on Chevron Corp and Alfi 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 Alfi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Alfi.

Diversification Opportunities for Chevron Corp and Alfi

-0.34
  Correlation Coefficient

Very good diversification

The 3 months correlation between Chevron and Alfi is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and Alfi Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alfi Inc 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 Alfi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alfi Inc has no effect on the direction of Chevron Corp i.e., Chevron Corp and Alfi go up and down completely randomly.

Pair Corralation between Chevron Corp and Alfi

Considering the 90-day investment horizon Chevron Corp is expected to generate 0.71 times more return on investment than Alfi. However, Chevron Corp is 1.41 times less risky than Alfi. It trades about 0.16 of its potential returns per unit of risk. Alfi Inc is currently generating about 0.04 per unit of risk. If you would invest  14,520  in Chevron Corp on May 21, 2022 and sell it today you would earn a total of  1,249  from holding Chevron Corp or generate 8.6% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Chevron Corp  vs.  Alfi Inc

 Performance (%) 
       Timeline  
Chevron Corp 
Chevron Performance
0 of 100
Over the last 90 days Chevron Corp has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Chevron Price Channel

Alfi Inc 
Alfi Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Alfi Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak essential indicators, Alfi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Alfi Price Channel

Chevron Corp and Alfi Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Chevron Corp and Alfi

The main advantage of trading using opposite Chevron Corp and Alfi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, Alfi 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 Alfi will offset losses from the drop in Alfi's long position.
The idea behind Chevron Corp and Alfi Inc 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.

Alfi Inc

Pair trading matchups for Alfi

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Alfi as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Alfi's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Alfi's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Alfi Inc.
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Go
Equity Valuation
Check real value of public entities based on technical and fundamental data
Go
Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Equity Search
Search for actively traded equities including funds and ETFs from over 30 global markets
Go
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Fund Screener
Find actively-traded funds from around the world traded on over 30 global exchanges
Go
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Go
Sync Your Broker
Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors.
Go