Correlation Between Chesapeake Energy and American Creek
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and American Creek 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 American Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and American Creek Resources, you can compare the effects of market volatilities on Chesapeake Energy and American Creek 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 American Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and American Creek.
Diversification Opportunities for Chesapeake Energy and American Creek
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and American is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and American Creek Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Creek Resources 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 American Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Creek Resources has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and American Creek go up and down completely randomly.
Pair Corralation between Chesapeake Energy and American Creek
If you would invest 22.00 in American Creek Resources on August 25, 2024 and sell it today you would earn a total of 1.00 from holding American Creek Resources or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chesapeake Energy vs. American Creek Resources
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| American Creek Resources |
Chesapeake Energy and American Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and American Creek
The main advantage of trading using opposite Chesapeake Energy and American Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, American Creek 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 American Creek will offset losses from the drop in American Creek's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| American Creek vs. Ascendant Resources | American Creek vs. Cantex Mine Development | American Creek vs. Amarc Resources | American Creek vs. Sterling Metals Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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