Correlation Between Chesapeake Energy and Yamana Gold
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Yamana Gold 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 Yamana Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Yamana Gold, you can compare the effects of market volatilities on Chesapeake Energy and Yamana Gold 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 Yamana Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Yamana Gold.
Diversification Opportunities for Chesapeake Energy and Yamana Gold
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chesapeake and Yamana is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Yamana Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yamana Gold 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 Yamana Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yamana Gold has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Yamana Gold go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Yamana Gold
If you would invest 585.00 in Yamana Gold on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Yamana Gold or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 1.18% |
| Values | Daily Returns |
Chesapeake Energy vs. Yamana Gold
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Yamana Gold |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Energy and Yamana Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Yamana Gold
The main advantage of trading using opposite Chesapeake Energy and Yamana Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Yamana Gold 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 Yamana Gold will offset losses from the drop in Yamana Gold's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
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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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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