Correlation Between Chesapeake Utilities and KINGBOARD CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and KINGBOARD CHEMICAL, you can compare the effects of market volatilities on Chesapeake Utilities and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and KINGBOARD CHEMICAL.
Diversification Opportunities for Chesapeake Utilities and KINGBOARD CHEMICAL
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and KINGBOARD is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and KINGBOARD CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KINGBOARD CHEMICAL has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and KINGBOARD CHEMICAL go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and KINGBOARD CHEMICAL
Assuming the 90 days horizon Chesapeake Utilities is expected to under-perform the KINGBOARD CHEMICAL. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Utilities is 2.57 times less risky than KINGBOARD CHEMICAL. The stock trades about -0.02 of its potential returns per unit of risk. The KINGBOARD CHEMICAL is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 246.00 in KINGBOARD CHEMICAL on December 1, 2024 and sell it today you would earn a total of 40.00 from holding KINGBOARD CHEMICAL or generate 16.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. KINGBOARD CHEMICAL
Performance |
| Timeline |
| Chesapeake Utilities |
| KINGBOARD CHEMICAL |
Chesapeake Utilities and KINGBOARD CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and KINGBOARD CHEMICAL
The main advantage of trading using opposite Chesapeake Utilities and KINGBOARD CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL will offset losses from the drop in KINGBOARD CHEMICAL's long position.| Chesapeake Utilities vs. Platinum Investment Management | Chesapeake Utilities vs. Jacquet Metal Service | Chesapeake Utilities vs. Eskay Mining Corp | Chesapeake Utilities vs. CEOTRONICS |
| KINGBOARD CHEMICAL vs. Gaztransport et technigaz | KINGBOARD CHEMICAL vs. OFFICE DEPOT | KINGBOARD CHEMICAL vs. Corporate Office Properties | KINGBOARD CHEMICAL vs. Yuexiu Transport Infrastructure |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |