Correlation Between Chesapeake Utilities and FIH Mobile
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and FIH Mobile 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 FIH Mobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and FIH Mobile Limited, you can compare the effects of market volatilities on Chesapeake Utilities and FIH Mobile 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 FIH Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and FIH Mobile.
Diversification Opportunities for Chesapeake Utilities and FIH Mobile
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and FIH is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and FIH Mobile Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIH Mobile Limited 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 FIH Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIH Mobile Limited has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and FIH Mobile go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and FIH Mobile
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 1.85 times less return on investment than FIH Mobile. But when comparing it to its historical volatility, Chesapeake Utilities is 4.34 times less risky than FIH Mobile. It trades about 0.14 of its potential returns per unit of risk. FIH Mobile Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7.80 in FIH Mobile Limited on September 3, 2024 and sell it today you would earn a total of 2.20 from holding FIH Mobile Limited or generate 28.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. FIH Mobile Limited
Performance |
| Timeline |
| Chesapeake Utilities |
| FIH Mobile Limited |
Chesapeake Utilities and FIH Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and FIH Mobile
The main advantage of trading using opposite Chesapeake Utilities and FIH Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, FIH Mobile 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 FIH Mobile will offset losses from the drop in FIH Mobile's long position.| Chesapeake Utilities vs. ENN Energy Holdings | Chesapeake Utilities vs. Superior Plus Corp | Chesapeake Utilities vs. NMI Holdings | Chesapeake Utilities vs. Origin Agritech |
| FIH Mobile vs. ADRIATIC METALS LS 013355 | FIH Mobile vs. ITALIAN WINE BRANDS | FIH Mobile vs. PACIFIC ONLINE | FIH Mobile vs. VIVA WINE GROUP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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