Correlation Between Chesapeake Utilities and Guangzhou Baiyunshan
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Guangzhou Baiyunshan 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 Guangzhou Baiyunshan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Guangzhou Baiyunshan Pharmaceutical, you can compare the effects of market volatilities on Chesapeake Utilities and Guangzhou Baiyunshan 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 Guangzhou Baiyunshan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Guangzhou Baiyunshan.
Diversification Opportunities for Chesapeake Utilities and Guangzhou Baiyunshan
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chesapeake and Guangzhou is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Guangzhou Baiyunshan Pharmaceu in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guangzhou Baiyunshan 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 Guangzhou Baiyunshan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guangzhou Baiyunshan has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Guangzhou Baiyunshan go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Guangzhou Baiyunshan
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.79 times more return on investment than Guangzhou Baiyunshan. However, Chesapeake Utilities is 1.26 times less risky than Guangzhou Baiyunshan. It trades about 0.16 of its potential returns per unit of risk. Guangzhou Baiyunshan Pharmaceutical is currently generating about -0.2 per unit of risk. If you would invest 11,500 in Chesapeake Utilities on October 25, 2024 and sell it today you would earn a total of 400.00 from holding Chesapeake Utilities or generate 3.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Guangzhou Baiyunshan Pharmaceu
Performance |
| Timeline |
| Chesapeake Utilities |
| Guangzhou Baiyunshan |
Chesapeake Utilities and Guangzhou Baiyunshan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Guangzhou Baiyunshan
The main advantage of trading using opposite Chesapeake Utilities and Guangzhou Baiyunshan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Guangzhou Baiyunshan 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 Guangzhou Baiyunshan will offset losses from the drop in Guangzhou Baiyunshan's long position.| Chesapeake Utilities vs. Atmos Energy | Chesapeake Utilities vs. China Resources Gas | Chesapeake Utilities vs. Superior Plus Corp | Chesapeake Utilities vs. Origin Agritech |
| Guangzhou Baiyunshan vs. Universal Display | Guangzhou Baiyunshan vs. Cass Information Systems | Guangzhou Baiyunshan vs. COLUMBIA SPORTSWEAR | Guangzhou Baiyunshan vs. NTT DATA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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