Correlation Between Chesapeake Utilities and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and MUTUIONLINE 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 MUTUIONLINE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and MUTUIONLINE, you can compare the effects of market volatilities on Chesapeake Utilities and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and MUTUIONLINE.
Diversification Opportunities for Chesapeake Utilities and MUTUIONLINE
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chesapeake and MUTUIONLINE is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and MUTUIONLINE go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and MUTUIONLINE
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 2.36 times less return on investment than MUTUIONLINE. But when comparing it to its historical volatility, Chesapeake Utilities is 1.42 times less risky than MUTUIONLINE. It trades about 0.03 of its potential returns per unit of risk. MUTUIONLINE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,705 in MUTUIONLINE on August 26, 2024 and sell it today you would earn a total of 1,000.00 from holding MUTUIONLINE or generate 36.97% 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. MUTUIONLINE
Performance |
| Timeline |
| Chesapeake Utilities |
| MUTUIONLINE |
Chesapeake Utilities and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and MUTUIONLINE
The main advantage of trading using opposite Chesapeake Utilities and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| Chesapeake Utilities vs. Snam SpA | Chesapeake Utilities vs. Superior Plus Corp | Chesapeake Utilities vs. NMI Holdings | Chesapeake Utilities vs. Origin Agritech |
| MUTUIONLINE vs. Cass Information Systems | MUTUIONLINE vs. OFFICE DEPOT | MUTUIONLINE vs. Chesapeake Utilities | MUTUIONLINE vs. DATAGROUP SE |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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