Correlation Between MPH Health and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both MPH Health 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 MPH Health and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPH Health Care and Chesapeake Utilities, you can compare the effects of market volatilities on MPH Health 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 MPH Health with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPH Health and Chesapeake Utilities.
Diversification Opportunities for MPH Health and Chesapeake Utilities
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between MPH and Chesapeake is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MPH Health Care and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and MPH Health 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 MPH Health Care 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 MPH Health i.e., MPH Health and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between MPH Health and Chesapeake Utilities
Assuming the 90 days trading horizon MPH Health Care is expected to generate 1.94 times more return on investment than Chesapeake Utilities. However, MPH Health is 1.94 times more volatile than Chesapeake Utilities. It trades about -0.03 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about -0.33 per unit of risk. If you would invest 2,420 in MPH Health Care on October 11, 2024 and sell it today you would lose (40.00) from holding MPH Health Care or give up 1.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
MPH Health Care vs. Chesapeake Utilities
Performance |
| Timeline |
| MPH Health Care |
| Chesapeake Utilities |
MPH Health and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPH Health and Chesapeake Utilities
The main advantage of trading using opposite MPH Health and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPH Health 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.| MPH Health vs. TYSON FOODS A | MPH Health vs. ADRIATIC METALS LS 013355 | MPH Health vs. Zijin Mining Group | MPH Health vs. Astral Foods Limited |
| 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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