Correlation Between Chesapeake Utilities and Barrick Gold
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Barrick Gold 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 Barrick Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Barrick Gold, you can compare the effects of market volatilities on Chesapeake Utilities and Barrick Gold 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 Barrick Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Barrick Gold.
Diversification Opportunities for Chesapeake Utilities and Barrick Gold
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chesapeake and Barrick is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Barrick Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrick Gold 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 Barrick Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrick Gold has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Barrick Gold go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Barrick Gold
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 2.48 times less return on investment than Barrick Gold. But when comparing it to its historical volatility, Chesapeake Utilities is 1.67 times less risky than Barrick Gold. It trades about 0.07 of its potential returns per unit of risk. Barrick Gold is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,582 in Barrick Gold on September 14, 2024 and sell it today you would earn a total of 66.00 from holding Barrick Gold or generate 4.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Barrick Gold
Performance |
| Timeline |
| Chesapeake Utilities |
| Barrick Gold |
Chesapeake Utilities and Barrick Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Barrick Gold
The main advantage of trading using opposite Chesapeake Utilities and Barrick Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Barrick Gold 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 Barrick Gold will offset losses from the drop in Barrick Gold's long position.| Chesapeake Utilities vs. Gaztransport Technigaz SA | Chesapeake Utilities vs. Nok Airlines PCL | Chesapeake Utilities vs. Big 5 Sporting | Chesapeake Utilities vs. DICKS Sporting Goods |
| Barrick Gold vs. Benchmark Electronics | Barrick Gold vs. Chesapeake Utilities | Barrick Gold vs. BJs Restaurants | Barrick Gold vs. LPKF Laser Electronics |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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