Correlation Between Chesapeake Energy and EQT
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and EQT 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 Energy and EQT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and EQT Corporation, you can compare the effects of market volatilities on Chesapeake Energy and EQT 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 Energy with a short position of EQT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and EQT.
Diversification Opportunities for Chesapeake Energy and EQT
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and EQT is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and EQT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQT Corporation and Chesapeake Energy 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 Energy are associated (or correlated) with EQT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQT Corporation has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and EQT go up and down completely randomly.
Pair Corralation between Chesapeake Energy and EQT
If you would invest 3,604 in EQT Corporation on August 24, 2024 and sell it today you would earn a total of 988.00 from holding EQT Corporation or generate 27.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chesapeake Energy vs. EQT Corp.
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| EQT Corporation |
Chesapeake Energy and EQT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and EQT
The main advantage of trading using opposite Chesapeake Energy and EQT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, EQT 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 EQT will offset losses from the drop in EQT's long position.| Chesapeake Energy vs. Range Resources Corp | Chesapeake Energy vs. Antero Resources Corp | Chesapeake Energy vs. EQT Corporation | Chesapeake Energy vs. Comstock Resources |
| EQT vs. Antero Resources Corp | EQT vs. Matador Resources | EQT vs. Devon Energy | EQT vs. Diamondback Energy |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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