Correlation Between Chesapeake Utilities and SEKISUI CHEMICAL
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and SEKISUI 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 SEKISUI 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 SEKISUI CHEMICAL, you can compare the effects of market volatilities on Chesapeake Utilities and SEKISUI 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 SEKISUI CHEMICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and SEKISUI CHEMICAL.
Diversification Opportunities for Chesapeake Utilities and SEKISUI CHEMICAL
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and SEKISUI is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and SEKISUI CHEMICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEKISUI 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 SEKISUI CHEMICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEKISUI CHEMICAL has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and SEKISUI CHEMICAL go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and SEKISUI CHEMICAL
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 1.17 times less return on investment than SEKISUI CHEMICAL. In addition to that, Chesapeake Utilities is 1.01 times more volatile than SEKISUI CHEMICAL. It trades about 0.33 of its total potential returns per unit of risk. SEKISUI CHEMICAL is currently generating about 0.38 per unit of volatility. If you would invest 1,290 in SEKISUI CHEMICAL on September 1, 2024 and sell it today you would earn a total of 210.00 from holding SEKISUI CHEMICAL or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. SEKISUI CHEMICAL
Performance |
| Timeline |
| Chesapeake Utilities |
| SEKISUI CHEMICAL |
Chesapeake Utilities and SEKISUI CHEMICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and SEKISUI CHEMICAL
The main advantage of trading using opposite Chesapeake Utilities and SEKISUI CHEMICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, SEKISUI 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 SEKISUI CHEMICAL will offset losses from the drop in SEKISUI CHEMICAL's long position.| Chesapeake Utilities vs. Coeur Mining | Chesapeake Utilities vs. Check Point Software | Chesapeake Utilities vs. PKSHA TECHNOLOGY INC | Chesapeake Utilities vs. Vishay Intertechnology |
| SEKISUI CHEMICAL vs. Sumitomo Mitsui Construction | SEKISUI CHEMICAL vs. Hanison Construction Holdings | SEKISUI CHEMICAL vs. Federal Agricultural Mortgage | SEKISUI CHEMICAL vs. Playtech plc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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