Correlation Between CHEVRON CDR and Tectonic Metals

Can any of the company-specific risk be diversified away by investing in both CHEVRON CDR and Tectonic Metals 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 CDR and Tectonic Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for CHEVRON CDR and Tectonic Metals

0.71

Correlation Coefficient

CHEVRON CDR  Tectonic Metals

Poor diversification

The 3 months correlation between CHEVRON and Tectonic is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding CHEVRON CDR and Tectonic Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tectonic Metals and CHEVRON CDR 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 CDR are associated (or correlated) with Tectonic Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tectonic Metals has no effect on the direction of CHEVRON CDR i.e., CHEVRON CDR and Tectonic Metals go up and down completely randomly.

Pair Corralation between CHEVRON CDR and Tectonic Metals

Assuming the 90 days trading horizon CHEVRON CDR is expected to generate 90.67 times less return on investment than Tectonic Metals. But when comparing it to its historical volatility, CHEVRON CDR is 77.86 times less risky than Tectonic Metals. It trades about 0.12 of its potential returns per unit of risk. Tectonic Metals is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Tectonic Metals on April 21, 2025 and sell it today you would earn a total of  116.00  from holding Tectonic Metals or generate 2320.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

CHEVRON CDR  vs.  Tectonic Metals

CHEVRON CDR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CHEVRON CDR are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal technical and fundamental indicators, CHEVRON CDR may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Tectonic Metals

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tectonic Metals are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental indicators, Tectonic Metals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CHEVRON CDR and Tectonic Metals

The main advantage of trading using opposite CHEVRON CDR and Tectonic Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHEVRON CDR position performs unexpectedly, Tectonic Metals 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 Tectonic Metals will offset losses from the drop in Tectonic Metals' long position.

The idea behind CHEVRON CDR and Tectonic Metals 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .