Correlation Between Chesapeake Utilities and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Virtus Investment 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 Virtus Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Virtus Investment Partners, you can compare the effects of market volatilities on Chesapeake Utilities and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Virtus Investment.
Diversification Opportunities for Chesapeake Utilities and Virtus Investment
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chesapeake and Virtus is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Virtus Investment go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Virtus Investment
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 1.01 times more return on investment than Virtus Investment. However, Chesapeake Utilities is 1.01 times more volatile than Virtus Investment Partners. It trades about -0.02 of its potential returns per unit of risk. Virtus Investment Partners is currently generating about -0.19 per unit of risk. If you would invest 11,500 in Chesapeake Utilities on October 29, 2024 and sell it today you would lose (100.00) from holding Chesapeake Utilities or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Virtus Investment Partners
Performance |
| Timeline |
| Chesapeake Utilities |
| Virtus Investment |
Chesapeake Utilities and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Virtus Investment
The main advantage of trading using opposite Chesapeake Utilities and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| Chesapeake Utilities vs. Penta Ocean Construction Co | Chesapeake Utilities vs. Granite Construction | Chesapeake Utilities vs. Siemens Healthineers AG | Chesapeake Utilities vs. ALEFARM BREWING DK 05 |
| Virtus Investment vs. Highlight Communications AG | Virtus Investment vs. Easy Software AG | Virtus Investment vs. Cognizant Technology Solutions | Virtus Investment vs. PKSHA TECHNOLOGY 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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