Correlation Between Chesapeake Utilities and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and WT 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 WT 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 WT OFFSHORE, you can compare the effects of market volatilities on Chesapeake Utilities and WT 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and WT OFFSHORE.
Diversification Opportunities for Chesapeake Utilities and WT OFFSHORE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and UWV is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and WT OFFSHORE
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 0.39 times more return on investment than WT OFFSHORE. However, Chesapeake Utilities is 2.57 times less risky than WT OFFSHORE. It trades about 0.12 of its potential returns per unit of risk. WT OFFSHORE is currently generating about 0.0 per unit of risk. If you would invest 10,079 in Chesapeake Utilities on September 2, 2024 and sell it today you would earn a total of 2,221 from holding Chesapeake Utilities or generate 22.04% 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. WT OFFSHORE
Performance |
| Timeline |
| Chesapeake Utilities |
| WT OFFSHORE |
Chesapeake Utilities and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and WT OFFSHORE
The main advantage of trading using opposite Chesapeake Utilities and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, WT 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Chesapeake Utilities vs. CenterPoint Energy | Chesapeake Utilities vs. Snam SpA | Chesapeake Utilities vs. Superior Plus Corp | Chesapeake Utilities vs. NMI Holdings |
| WT OFFSHORE vs. SK TELECOM TDADR | WT OFFSHORE vs. Rogers Communications | WT OFFSHORE vs. Highlight Communications AG | WT OFFSHORE vs. Singapore Telecommunications Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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