Correlation Between Chesapeake Energy and Brooge Energy
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Brooge Energy 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 Brooge Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Brooge Energy Limited, you can compare the effects of market volatilities on Chesapeake Energy and Brooge Energy 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 Brooge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Brooge Energy.
Diversification Opportunities for Chesapeake Energy and Brooge Energy
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and Brooge is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Brooge Energy Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brooge Energy Limited 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 Brooge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brooge Energy Limited has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Brooge Energy go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Brooge Energy
If you would invest 0.11 in Brooge Energy Limited on August 26, 2024 and sell it today you would earn a total of 0.04 from holding Brooge Energy Limited or generate 36.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 6.25% |
| Values | Daily Returns |
Chesapeake Energy vs. Brooge Energy Limited
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Brooge Energy Limited |
Chesapeake Energy and Brooge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Brooge Energy
The main advantage of trading using opposite Chesapeake Energy and Brooge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Brooge Energy 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 Brooge Energy will offset losses from the drop in Brooge Energy's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Brooge Energy vs. Brooge Holdings | Brooge Energy vs. Aquagold International | Brooge Energy vs. Morningstar Unconstrained Allocation | Brooge Energy vs. Thrivent High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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