Correlation Between Chesapeake Utilities and Apple
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Apple Inc, you can compare the effects of market volatilities on Chesapeake Utilities and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Apple.
Diversification Opportunities for Chesapeake Utilities and Apple
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and Apple is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Apple go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Apple
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 2.12 times less return on investment than Apple. In addition to that, Chesapeake Utilities is 1.04 times more volatile than Apple Inc. It trades about 0.03 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.06 per unit of volatility. If you would invest 17,060 in Apple Inc on August 27, 2024 and sell it today you would earn a total of 5,000 from holding Apple Inc or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Apple Inc
Performance |
| Timeline |
| Chesapeake Utilities |
| Apple Inc |
Chesapeake Utilities and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Apple
The main advantage of trading using opposite Chesapeake Utilities and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Chesapeake Utilities vs. Pure Storage | Chesapeake Utilities vs. Datadog | Chesapeake Utilities vs. Titan Machinery | Chesapeake Utilities vs. DOCDATA |
| Apple vs. CITY OFFICE REIT | Apple vs. STMicroelectronics NV | Apple vs. Algonquin Power Utilities | Apple vs. Chesapeake Utilities |
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 Stocks Directory module to find actively traded stocks across global markets.
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