Correlation Between Chesapeake Utilities and SOLSTAD OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and SOLSTAD OFFSHORE NK, you can compare the effects of market volatilities on Chesapeake Utilities and SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and SOLSTAD OFFSHORE.
Diversification Opportunities for Chesapeake Utilities and SOLSTAD OFFSHORE
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and SOLSTAD is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and SOLSTAD OFFSHORE NK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOLSTAD OFFSHORE has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and SOLSTAD OFFSHORE go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and SOLSTAD OFFSHORE
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.51 times more return on investment than SOLSTAD OFFSHORE. However, Chesapeake Utilities is 1.95 times less risky than SOLSTAD OFFSHORE. It trades about 0.11 of its potential returns per unit of risk. SOLSTAD OFFSHORE NK is currently generating about -0.11 per unit of risk. If you would invest 11,700 in Chesapeake Utilities on November 28, 2024 and sell it today you would earn a total of 300.00 from holding Chesapeake Utilities or generate 2.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. SOLSTAD OFFSHORE NK
Performance |
| Timeline |
| Chesapeake Utilities |
| SOLSTAD OFFSHORE |
Chesapeake Utilities and SOLSTAD OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and SOLSTAD OFFSHORE
The main advantage of trading using opposite Chesapeake Utilities and SOLSTAD OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, SOLSTAD OFFSHORE 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 SOLSTAD OFFSHORE will offset losses from the drop in SOLSTAD OFFSHORE's long position.| Chesapeake Utilities vs. FAST RETAIL ADR | Chesapeake Utilities vs. Cognizant Technology Solutions | Chesapeake Utilities vs. Firan Technology Group | Chesapeake Utilities vs. Algonquin Power Utilities |
| SOLSTAD OFFSHORE vs. Stag Industrial | SOLSTAD OFFSHORE vs. CVR Medical Corp | SOLSTAD OFFSHORE vs. Fortescue Metals Group | SOLSTAD OFFSHORE vs. SERI INDUSTRIAL EO |
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 Stocks Directory module to find actively traded stocks across global markets.
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