Correlation Between Natural Grocers and Chevron Corp

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

By analyzing existing cross correlation between Natural Grocers by and Chevron Corp, you can compare the effects of market volatilities on Natural Grocers and Chevron Corp 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 Natural Grocers with a short position of Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Grocers and Chevron Corp.

Diversification Opportunities for Natural Grocers and Chevron Corp

-0.6

Correlation Coefficient

Natural Grocers  Chevron Corp

Excellent diversification

The 3 months correlation between Natural and Chevron is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Natural Grocers by and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp and Natural Grocers 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 Natural Grocers by are associated (or correlated) with Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Natural Grocers i.e., Natural Grocers and Chevron Corp go up and down completely randomly.

Pair Corralation between Natural Grocers and Chevron Corp

Given the investment horizon of 90 days Natural Grocers by is expected to generate 1.43 times more return on investment than Chevron Corp. However, Natural Grocers is 1.43 times more volatile than Chevron Corp. It trades about 0.08 of its potential returns per unit of risk. Chevron Corp is currently generating about -0.03 per unit of risk. If you would invest  4,408  in Natural Grocers by on February 3, 2025 and sell it today you would earn a total of  651.00  from holding Natural Grocers by or generate 14.77% return on investment over 90 days.

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

Natural Grocers by  vs.  Chevron Corp

Natural Grocers by

Risk-Adjusted Performance

Modest

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

Chevron Corp

Risk-Adjusted Performance

Very Weak

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 recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Natural Grocers and Chevron Corp

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

The idea behind Natural Grocers by and Chevron Corp 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.