Correlation Between Chesapeake Utilities and CAPITAL ONE
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and CAPITAL ONE 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 CAPITAL ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and CAPITAL ONE FIN, you can compare the effects of market volatilities on Chesapeake Utilities and CAPITAL ONE 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 CAPITAL ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and CAPITAL ONE.
Diversification Opportunities for Chesapeake Utilities and CAPITAL ONE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and CAPITAL is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and CAPITAL ONE FIN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAPITAL ONE FIN 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 CAPITAL ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAPITAL ONE FIN has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and CAPITAL ONE go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and CAPITAL ONE
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.89 times more return on investment than CAPITAL ONE. However, Chesapeake Utilities is 1.13 times less risky than CAPITAL ONE. It trades about 0.1 of its potential returns per unit of risk. CAPITAL ONE FIN is currently generating about -0.14 per unit of risk. If you would invest 11,800 in Chesapeake Utilities on September 12, 2024 and sell it today you would earn a total of 300.00 from holding Chesapeake Utilities or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chesapeake Utilities vs. CAPITAL ONE FIN
Performance |
| Timeline |
| Chesapeake Utilities |
| CAPITAL ONE FIN |
Chesapeake Utilities and CAPITAL ONE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and CAPITAL ONE
The main advantage of trading using opposite Chesapeake Utilities and CAPITAL ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, CAPITAL ONE 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 CAPITAL ONE will offset losses from the drop in CAPITAL ONE's long position.| Chesapeake Utilities vs. AIR PRODCHEMICALS | Chesapeake Utilities vs. National Storage Affiliates | Chesapeake Utilities vs. SHIN ETSU CHEMICAL | Chesapeake Utilities vs. X FAB Silicon Foundries |
| CAPITAL ONE vs. ALBIS LEASING AG | CAPITAL ONE vs. UNITED UTILITIES GR | CAPITAL ONE vs. Micron Technology | CAPITAL ONE 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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