Correlation Between Chesapeake Utilities and Sinopharm Group
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Sinopharm Group 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 Sinopharm Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Sinopharm Group Co, you can compare the effects of market volatilities on Chesapeake Utilities and Sinopharm Group 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 Sinopharm Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Sinopharm Group.
Diversification Opportunities for Chesapeake Utilities and Sinopharm Group
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and Sinopharm is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Sinopharm Group Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopharm Group 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 Sinopharm Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopharm Group has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Sinopharm Group go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Sinopharm Group
Assuming the 90 days horizon Chesapeake Utilities is expected to generate 2.01 times less return on investment than Sinopharm Group. But when comparing it to its historical volatility, Chesapeake Utilities is 1.84 times less risky than Sinopharm Group. It trades about 0.16 of its potential returns per unit of risk. Sinopharm Group Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 192.00 in Sinopharm Group Co on September 5, 2024 and sell it today you would earn a total of 62.00 from holding Sinopharm Group Co or generate 32.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Sinopharm Group Co
Performance |
| Timeline |
| Chesapeake Utilities |
| Sinopharm Group |
Chesapeake Utilities and Sinopharm Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Sinopharm Group
The main advantage of trading using opposite Chesapeake Utilities and Sinopharm Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Sinopharm Group 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 Sinopharm Group will offset losses from the drop in Sinopharm Group's long position.| Chesapeake Utilities vs. Superior Plus Corp | Chesapeake Utilities vs. NMI Holdings | Chesapeake Utilities vs. Origin Agritech | Chesapeake Utilities vs. SIVERS SEMICONDUCTORS AB |
| Sinopharm Group vs. Mitsubishi Gas Chemical | Sinopharm Group vs. Siamgas And Petrochemicals | Sinopharm Group vs. Chesapeake Utilities | Sinopharm Group vs. CHEMICAL INDUSTRIES |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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