Correlation Between Chevron Corp and Edesa Holding

Can any of the company-specific risk be diversified away by investing in both Chevron Corp and Edesa Holding 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 Edesa Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chevron Corp CEDEAR and Edesa Holding SA, you can compare the effects of market volatilities on Chevron Corp and Edesa Holding 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 Edesa Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and Edesa Holding.

Diversification Opportunities for Chevron Corp and Edesa Holding

-0.78

Correlation Coefficient

Chevron Corp  Edesa Holding

Pay attention - limited upside

The 3 months correlation between Chevron and Edesa is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp CEDEAR and Edesa Holding SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Edesa Holding SA 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 CEDEAR are associated (or correlated) with Edesa Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Edesa Holding SA has no effect on the direction of Chevron Corp i.e., Chevron Corp and Edesa Holding go up and down completely randomly.

Pair Corralation between Chevron Corp and Edesa Holding

Assuming the 90 days trading horizon Chevron Corp CEDEAR is expected to generate 0.13 times more return on investment than Edesa Holding. However, Chevron Corp CEDEAR is 7.64 times less risky than Edesa Holding. It trades about 0.21 of its potential returns per unit of risk. Edesa Holding SA is currently generating about -0.13 per unit of risk. If you would invest  1,005,000  in Chevron Corp CEDEAR on April 23, 2025 and sell it today you would earn a total of  200,000  from holding Chevron Corp CEDEAR or generate 19.9% return on investment over 90 days.

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

Chevron Corp CEDEAR  vs.  Edesa Holding SA

Chevron Corp CEDEAR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp CEDEAR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Chevron Corp sustained solid returns over the last few months and may actually be approaching a breakup point.

Edesa Holding SA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Edesa Holding SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Chevron Corp and Edesa Holding

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

The idea behind Chevron Corp CEDEAR and Edesa Holding SA 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.