Correlation Between Chesapeake Utilities and Howden Joinery
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Howden Joinery 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 Chesapeake Utilities and Howden Joinery into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Howden Joinery Group, you can compare the effects of market volatilities on Chesapeake Utilities and Howden Joinery 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 Chesapeake Utilities with a short position of Howden Joinery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Howden Joinery.
Diversification Opportunities for Chesapeake Utilities and Howden Joinery
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and Howden is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Howden Joinery Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Howden Joinery Group and Chesapeake Utilities 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 Chesapeake Utilities are associated (or correlated) with Howden Joinery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Howden Joinery Group has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Howden Joinery go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Howden Joinery
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 19.55 times less return on investment than Howden Joinery. But when comparing it to its historical volatility, Chesapeake Utilities is 1.37 times less risky than Howden Joinery. It trades about 0.01 of its potential returns per unit of risk. Howden Joinery Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 939.00 in Howden Joinery Group on November 4, 2024 and sell it today you would earn a total of 35.00 from holding Howden Joinery Group or generate 3.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Howden Joinery Group
Performance |
| Timeline |
| Chesapeake Utilities |
| Howden Joinery Group |
Chesapeake Utilities and Howden Joinery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Howden Joinery
The main advantage of trading using opposite Chesapeake Utilities and Howden Joinery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Howden Joinery 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 Howden Joinery will offset losses from the drop in Howden Joinery's long position.| Chesapeake Utilities vs. Alliance Data Systems | Chesapeake Utilities vs. TAL Education Group | Chesapeake Utilities vs. Datadog | Chesapeake Utilities vs. Perdoceo Education |
| Howden Joinery vs. MAVEN WIRELESS SWEDEN | Howden Joinery vs. PEPTONIC MEDICAL | Howden Joinery vs. CARSALESCOM | Howden Joinery vs. Peijia Medical Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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