Correlation Between Chevron Corp and 3M

Can any of the company-specific risk be diversified away by investing in both Chevron Corp and 3M 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 3M into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Chevron Corp and 3M Company, you can compare the effects of market volatilities on Chevron Corp and 3M 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 3M. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chevron Corp and 3M.

Diversification Opportunities for Chevron Corp and 3M

0.45

Correlation Coefficient

Chevron Corp  3M

Very weak diversification

The 3 months correlation between Chevron and 3M is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chevron Corp and 3M Company in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M Company 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 3M. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M Company has no effect on the direction of Chevron Corp i.e., Chevron Corp and 3M go up and down completely randomly.

Pair Corralation between Chevron Corp and 3M

Considering the 90-day investment horizon Chevron Corp is expected to generate 5.92 times less return on investment than 3M. But when comparing it to its historical volatility, Chevron Corp is 1.62 times less risky than 3M. It trades about 0.03 of its potential returns per unit of risk. 3M Company is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  15,057  in 3M Company on July 25, 2025 and sell it today you would earn a total of  1,666  from holding 3M Company or generate 11.06% return on investment over 90 days.

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

Chevron Corp  vs.  3M Company

Chevron Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Chevron Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Chevron Corp is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

3M Company

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in 3M Company are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal primary indicators, 3M may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Chevron Corp and 3M

The main advantage of trading using opposite Chevron Corp and 3M positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chevron Corp position performs unexpectedly, 3M 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 3M will offset losses from the drop in 3M's long position.

The idea behind Chevron Corp and 3M Company 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.