Correlation Between Chesapeake Utilities and Computer
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Computer 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 Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Computer And Technologies, you can compare the effects of market volatilities on Chesapeake Utilities and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Computer.
Diversification Opportunities for Chesapeake Utilities and Computer
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Computer is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Computer go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Computer
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.46 times more return on investment than Computer. However, Chesapeake Utilities is 2.15 times less risky than Computer. It trades about 0.23 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.12 per unit of risk. If you would invest 11,400 in Chesapeake Utilities on October 22, 2024 and sell it today you would earn a total of 500.00 from holding Chesapeake Utilities or generate 4.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Computer And Technologies
Performance |
| Timeline |
| Chesapeake Utilities |
| Computer And Technologies |
Chesapeake Utilities and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Computer
The main advantage of trading using opposite Chesapeake Utilities and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| Chesapeake Utilities vs. INSURANCE AUST GRP | Chesapeake Utilities vs. QBE Insurance Group | Chesapeake Utilities vs. PRECISION DRILLING P | Chesapeake Utilities vs. FIH MOBILE |
| Computer vs. OFFICE DEPOT | Computer vs. MAVEN WIRELESS SWEDEN | Computer vs. Warner Music Group | Computer vs. Gol Intelligent Airlines |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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