Correlation Between Chesapeake Utilities and MOLSON COORS
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and MOLSON COORS 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 MOLSON COORS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on Chesapeake Utilities and MOLSON COORS 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 MOLSON COORS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and MOLSON COORS.
Diversification Opportunities for Chesapeake Utilities and MOLSON COORS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and MOLSON is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE 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 MOLSON COORS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and MOLSON COORS go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and MOLSON COORS
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.82 times more return on investment than MOLSON COORS. However, Chesapeake Utilities is 1.22 times less risky than MOLSON COORS. It trades about -0.02 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about -0.08 per unit of risk. If you would invest 12,039 in Chesapeake Utilities on October 19, 2024 and sell it today you would lose (139.00) from holding Chesapeake Utilities or give up 1.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| Chesapeake Utilities |
| MOLSON RS BEVERAGE |
Chesapeake Utilities and MOLSON COORS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and MOLSON COORS
The main advantage of trading using opposite Chesapeake Utilities and MOLSON COORS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, MOLSON COORS 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 MOLSON COORS will offset losses from the drop in MOLSON COORS's long position.| Chesapeake Utilities vs. Suntory Beverage Food | Chesapeake Utilities vs. RELIANCE STEEL AL | Chesapeake Utilities vs. MOLSON RS BEVERAGE | Chesapeake Utilities vs. Molson Coors Beverage |
| MOLSON COORS vs. UNITED UTILITIES GR | MOLSON COORS vs. PNC Financial Services | MOLSON COORS vs. CDN IMPERIAL BANK | MOLSON COORS vs. Chesapeake Utilities |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |