Correlation Between National Beverage and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both National Beverage 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 National Beverage and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Beverage Corp and Chesapeake Utilities, you can compare the effects of market volatilities on National Beverage 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 National Beverage with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Beverage and Chesapeake Utilities.
Diversification Opportunities for National Beverage and Chesapeake Utilities
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between National and Chesapeake is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding National Beverage Corp and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and National Beverage 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 National Beverage Corp 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 National Beverage i.e., National Beverage and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between National Beverage and Chesapeake Utilities
Assuming the 90 days horizon National Beverage Corp is expected to under-perform the Chesapeake Utilities. In addition to that, National Beverage is 1.55 times more volatile than Chesapeake Utilities. It trades about -0.12 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.11 per unit of volatility. If you would invest 11,800 in Chesapeake Utilities on September 12, 2024 and sell it today you would earn a total of 300.00 from holding Chesapeake Utilities or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Beverage Corp vs. Chesapeake Utilities
Performance |
| Timeline |
| National Beverage Corp |
| Chesapeake Utilities |
National Beverage and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Beverage and Chesapeake Utilities
The main advantage of trading using opposite National Beverage and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Beverage 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.| National Beverage vs. Superior Plus Corp | National Beverage vs. SIVERS SEMICONDUCTORS AB | National Beverage vs. NorAm Drilling AS | National Beverage vs. Norsk Hydro ASA |
| Chesapeake Utilities vs. AIR PRODCHEMICALS | Chesapeake Utilities vs. National Storage Affiliates | Chesapeake Utilities vs. SHIN ETSU CHEMICAL | Chesapeake Utilities vs. X FAB Silicon Foundries |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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