Correlation Between Chesapeake Utilities and COSTAR GROUP
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and COSTAR GROUP 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 COSTAR GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and COSTAR GROUP INC, you can compare the effects of market volatilities on Chesapeake Utilities and COSTAR GROUP 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 COSTAR GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and COSTAR GROUP.
Diversification Opportunities for Chesapeake Utilities and COSTAR GROUP
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and COSTAR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and COSTAR GROUP INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSTAR GROUP INC 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 COSTAR GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSTAR GROUP INC has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and COSTAR GROUP go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and COSTAR GROUP
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 1.28 times less return on investment than COSTAR GROUP. But when comparing it to its historical volatility, Chesapeake Utilities is 1.27 times less risky than COSTAR GROUP. It trades about 0.28 of its potential returns per unit of risk. COSTAR GROUP INC is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 6,715 in COSTAR GROUP INC on August 31, 2024 and sell it today you would earn a total of 1,021 from holding COSTAR GROUP INC or generate 15.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. COSTAR GROUP INC
Performance |
| Timeline |
| Chesapeake Utilities |
| COSTAR GROUP INC |
Chesapeake Utilities and COSTAR GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and COSTAR GROUP
The main advantage of trading using opposite Chesapeake Utilities and COSTAR GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, COSTAR GROUP 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 COSTAR GROUP will offset losses from the drop in COSTAR GROUP's long position.| Chesapeake Utilities vs. CenterPoint Energy | Chesapeake Utilities vs. Snam SpA | Chesapeake Utilities vs. ENN Energy Holdings | Chesapeake Utilities vs. Superior Plus Corp |
| COSTAR GROUP vs. GameStop Corp | COSTAR GROUP vs. Chesapeake Utilities | COSTAR GROUP vs. Scientific Games | COSTAR GROUP vs. MAVEN WIRELESS SWEDEN |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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