Correlation Between Focus Home and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both Focus Home and Chesapeake Utilities 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 Focus Home and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Home Interactive and Chesapeake Utilities, you can compare the effects of market volatilities on Focus Home and Chesapeake Utilities 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 Focus Home with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Home and Chesapeake Utilities.
Diversification Opportunities for Focus Home and Chesapeake Utilities
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Chesapeake is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Focus Home Interactive and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and Focus Home 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 Focus Home Interactive are associated (or correlated) with Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of Focus Home i.e., Focus Home and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between Focus Home and Chesapeake Utilities
Assuming the 90 days horizon Focus Home Interactive is expected to generate 4.53 times more return on investment than Chesapeake Utilities. However, Focus Home is 4.53 times more volatile than Chesapeake Utilities. It trades about 0.12 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.09 per unit of risk. If you would invest 798.00 in Focus Home Interactive on October 12, 2024 and sell it today you would earn a total of 1,422 from holding Focus Home Interactive or generate 178.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Home Interactive vs. Chesapeake Utilities
Performance |
| Timeline |
| Focus Home Interactive |
| Chesapeake Utilities |
Focus Home and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Home and Chesapeake Utilities
The main advantage of trading using opposite Focus Home and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Home position performs unexpectedly, Chesapeake Utilities 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 Chesapeake Utilities will offset losses from the drop in Chesapeake Utilities' long position.| Focus Home vs. AWILCO DRILLING PLC | Focus Home vs. BORR DRILLING NEW | Focus Home vs. Neinor Homes SA | Focus Home vs. American Homes 4 |
| Chesapeake Utilities vs. Firan Technology Group | Chesapeake Utilities vs. T MOBILE US | Chesapeake Utilities vs. T Mobile | Chesapeake Utilities vs. Zoom Video Communications |
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 the Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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