Correlation Between Chesapeake Utilities and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and CHINA EDUCATION 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 CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Chesapeake Utilities and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and CHINA EDUCATION.
Diversification Opportunities for Chesapeake Utilities and CHINA EDUCATION
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and CHINA is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and CHINA EDUCATION
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.7 times more return on investment than CHINA EDUCATION. However, Chesapeake Utilities is 1.44 times less risky than CHINA EDUCATION. It trades about -0.24 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.24 per unit of risk. If you would invest 11,900 in Chesapeake Utilities on October 16, 2024 and sell it today you would lose (600.00) from holding Chesapeake Utilities or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Chesapeake Utilities |
| CHINA EDUCATION GROUP |
Chesapeake Utilities and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and CHINA EDUCATION
The main advantage of trading using opposite Chesapeake Utilities and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Chesapeake Utilities vs. LIFEWAY FOODS | Chesapeake Utilities vs. DELTA AIR LINES | Chesapeake Utilities vs. Air New Zealand | Chesapeake Utilities vs. Delta Air Lines |
| CHINA EDUCATION vs. ZhongAn Online P | CHINA EDUCATION vs. Chesapeake Utilities | CHINA EDUCATION vs. United Utilities Group | CHINA EDUCATION vs. CNVISION MEDIA |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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