Correlation Between Chesapeake Utilities and CyberArk Software
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and CyberArk Software 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 CyberArk Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and CyberArk Software, you can compare the effects of market volatilities on Chesapeake Utilities and CyberArk Software 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 CyberArk Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and CyberArk Software.
Diversification Opportunities for Chesapeake Utilities and CyberArk Software
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and CyberArk is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and CyberArk Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CyberArk Software 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 CyberArk Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CyberArk Software has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and CyberArk Software go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and CyberArk Software
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.44 times more return on investment than CyberArk Software. However, Chesapeake Utilities is 2.26 times less risky than CyberArk Software. It trades about -0.1 of its potential returns per unit of risk. CyberArk Software is currently generating about -0.17 per unit of risk. If you would invest 12,137 in Chesapeake Utilities on December 31, 2024 and sell it today you would lose (437.00) from holding Chesapeake Utilities or give up 3.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. CyberArk Software
Performance |
| Timeline |
| Chesapeake Utilities |
| CyberArk Software |
Chesapeake Utilities and CyberArk Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and CyberArk Software
The main advantage of trading using opposite Chesapeake Utilities and CyberArk Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, CyberArk Software 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 CyberArk Software will offset losses from the drop in CyberArk Software's long position.| Chesapeake Utilities vs. BII Railway Transportation | Chesapeake Utilities vs. COSMOSTEEL HLDGS | Chesapeake Utilities vs. Columbia Sportswear | Chesapeake Utilities vs. UNIVMUSIC GRPADR050 |
| CyberArk Software vs. UNITED INTERNET N | CyberArk Software vs. GEAR4MUSIC LS 10 | CyberArk Software vs. Yuexiu Transport Infrastructure | CyberArk Software vs. United Internet AG |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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