Correlation Between Chesapeake Utilities and Look Holdings
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Look Holdings 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 Look Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Look Holdings, you can compare the effects of market volatilities on Chesapeake Utilities and Look Holdings 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 Look Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Look Holdings.
Diversification Opportunities for Chesapeake Utilities and Look Holdings
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Look is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Look Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Look Holdings 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 Look Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Look Holdings has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Look Holdings go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Look Holdings
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 1.85 times less return on investment than Look Holdings. In addition to that, Chesapeake Utilities is 1.47 times more volatile than Look Holdings. It trades about 0.1 of its total potential returns per unit of risk. Look Holdings is currently generating about 0.28 per unit of volatility. If you would invest 1,540 in Look Holdings on September 12, 2024 and sell it today you would earn a total of 80.00 from holding Look Holdings or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Chesapeake Utilities vs. Look Holdings
Performance |
| Timeline |
| Chesapeake Utilities |
| Look Holdings |
Chesapeake Utilities and Look Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Look Holdings
The main advantage of trading using opposite Chesapeake Utilities and Look Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Look Holdings 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 Look Holdings will offset losses from the drop in Look Holdings' long position.| Chesapeake Utilities vs. AIR PRODCHEMICALS | Chesapeake Utilities vs. National Storage Affiliates | Chesapeake Utilities vs. SHIN ETSU CHEMICAL | Chesapeake Utilities vs. X FAB Silicon Foundries |
| Look Holdings vs. Lion One Metals | Look Holdings vs. ADRIATIC METALS LS 013355 | Look Holdings vs. Western Copper and | Look Holdings vs. CODERE ONLINE LUX |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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