Correlation Between Chesapeake Utilities and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and CENTURIA OFFICE 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 CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Chesapeake Utilities and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and CENTURIA OFFICE.
Diversification Opportunities for Chesapeake Utilities and CENTURIA OFFICE
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chesapeake and CENTURIA is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and CENTURIA OFFICE
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.91 times more return on investment than CENTURIA OFFICE. However, Chesapeake Utilities is 1.1 times less risky than CENTURIA OFFICE. It trades about 0.09 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.01 per unit of risk. If you would invest 11,500 in Chesapeake Utilities on November 7, 2024 and sell it today you would earn a total of 300.00 from holding Chesapeake Utilities or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Chesapeake Utilities |
| CENTURIA OFFICE REIT |
Chesapeake Utilities and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and CENTURIA OFFICE
The main advantage of trading using opposite Chesapeake Utilities and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Chesapeake Utilities vs. New Residential Investment | Chesapeake Utilities vs. DIVERSIFIED ROYALTY | Chesapeake Utilities vs. SEI INVESTMENTS | Chesapeake Utilities vs. CHIBA BANK |
| CENTURIA OFFICE vs. CN MODERN DAIRY | CENTURIA OFFICE vs. Air Transport Services | CENTURIA OFFICE vs. Texas Roadhouse | CENTURIA OFFICE vs. Axfood AB |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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