Correlation Between Chesapeake Utilities and Telecom Argentina
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Telecom Argentina 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 Telecom Argentina into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Telecom Argentina SA, you can compare the effects of market volatilities on Chesapeake Utilities and Telecom Argentina 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 Telecom Argentina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Telecom Argentina.
Diversification Opportunities for Chesapeake Utilities and Telecom Argentina
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and Telecom is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Telecom Argentina SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telecom Argentina 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 Telecom Argentina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telecom Argentina has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Telecom Argentina go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Telecom Argentina
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 6.77 times less return on investment than Telecom Argentina. But when comparing it to its historical volatility, Chesapeake Utilities is 2.91 times less risky than Telecom Argentina. It trades about 0.08 of its potential returns per unit of risk. Telecom Argentina SA is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 501.00 in Telecom Argentina SA on November 3, 2024 and sell it today you would earn a total of 669.00 from holding Telecom Argentina SA or generate 133.53% 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. Telecom Argentina SA
Performance |
| Timeline |
| Chesapeake Utilities |
| Telecom Argentina |
Chesapeake Utilities and Telecom Argentina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Telecom Argentina
The main advantage of trading using opposite Chesapeake Utilities and Telecom Argentina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Telecom Argentina 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 Telecom Argentina will offset losses from the drop in Telecom Argentina's long position.| Chesapeake Utilities vs. SOCKET MOBILE NEW | Chesapeake Utilities vs. Magnachip Semiconductor | Chesapeake Utilities vs. ecotel communication ag | Chesapeake Utilities vs. T MOBILE US |
| Telecom Argentina vs. T Mobile | Telecom Argentina vs. China Mobile Limited | Telecom Argentina vs. Verizon Communications | Telecom Argentina vs. ATT Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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