Correlation Between VARIOUS EATERIES and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Chesapeake Utilities, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Chesapeake Utilities.
Diversification Opportunities for VARIOUS EATERIES and Chesapeake Utilities
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between VARIOUS and Chesapeake is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 VARIOUS EATERIES i.e., VARIOUS EATERIES and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and Chesapeake Utilities
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Chesapeake Utilities. In addition to that, VARIOUS EATERIES is 1.23 times more volatile than Chesapeake Utilities. It trades about -0.08 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.09 per unit of volatility. If you would invest 9,187 in Chesapeake Utilities on September 12, 2024 and sell it today you would earn a total of 2,913 from holding Chesapeake Utilities or generate 31.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. Chesapeake Utilities
Performance |
| Timeline |
| VARIOUS EATERIES |
| Chesapeake Utilities |
VARIOUS EATERIES and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and Chesapeake Utilities
The main advantage of trading using opposite VARIOUS EATERIES and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. Starbucks | VARIOUS EATERIES vs. Superior Plus Corp | VARIOUS EATERIES vs. SIVERS SEMICONDUCTORS AB | VARIOUS EATERIES vs. NorAm Drilling AS |
| 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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