Correlation Between The Chesapeake and Emerald Growth
Can any of the company-specific risk be diversified away by investing in both The Chesapeake and Emerald Growth 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 The Chesapeake and Emerald Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Chesapeake Growth and Emerald Growth Fund, you can compare the effects of market volatilities on The Chesapeake and Emerald Growth 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 The Chesapeake with a short position of Emerald Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Chesapeake and Emerald Growth.
Diversification Opportunities for The Chesapeake and Emerald Growth
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Emerald is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding The Chesapeake Growth and Emerald Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerald Growth and The Chesapeake 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 The Chesapeake Growth are associated (or correlated) with Emerald Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerald Growth has no effect on the direction of The Chesapeake i.e., The Chesapeake and Emerald Growth go up and down completely randomly.
Pair Corralation between The Chesapeake and Emerald Growth
Assuming the 90 days horizon The Chesapeake is expected to generate 2.6 times less return on investment than Emerald Growth. But when comparing it to its historical volatility, The Chesapeake Growth is 2.27 times less risky than Emerald Growth. It trades about 0.26 of its potential returns per unit of risk. Emerald Growth Fund is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,457 in Emerald Growth Fund on September 3, 2024 and sell it today you would earn a total of 253.00 from holding Emerald Growth Fund or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Chesapeake Growth vs. Emerald Growth Fund
Performance |
| Timeline |
| Chesapeake Growth |
| Emerald Growth |
The Chesapeake and Emerald Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The Chesapeake and Emerald Growth
The main advantage of trading using opposite The Chesapeake and Emerald Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Chesapeake position performs unexpectedly, Emerald Growth 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 Emerald Growth will offset losses from the drop in Emerald Growth's long position.| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
| Emerald Growth vs. The Hartford Midcap | Emerald Growth vs. Mfs Emerging Markets | Emerald Growth vs. Wells Fargo Special | Emerald Growth vs. Washington Mutual Investors |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |