Correlation Between Chesapeake Energy and Commerce Resources
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Commerce Resources 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 Commerce Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Commerce Resources Corp, you can compare the effects of market volatilities on Chesapeake Energy and Commerce Resources 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 Commerce Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Commerce Resources.
Diversification Opportunities for Chesapeake Energy and Commerce Resources
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and Commerce is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Commerce Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Resources Corp 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 Commerce Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Resources Corp has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Commerce Resources go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Commerce Resources
Assuming the 90 days horizon Chesapeake Energy is expected to generate 0.24 times more return on investment than Commerce Resources. However, Chesapeake Energy is 4.19 times less risky than Commerce Resources. It trades about 0.23 of its potential returns per unit of risk. Commerce Resources Corp is currently generating about -0.01 per unit of risk. If you would invest 5,468 in Chesapeake Energy on August 29, 2024 and sell it today you would earn a total of 782.00 from holding Chesapeake Energy or generate 14.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 38.1% |
| Values | Daily Returns |
Chesapeake Energy vs. Commerce Resources Corp
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Commerce Resources Corp |
Chesapeake Energy and Commerce Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Commerce Resources
The main advantage of trading using opposite Chesapeake Energy and Commerce Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Commerce Resources 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 Commerce Resources will offset losses from the drop in Commerce Resources' long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Commerce Resources vs. Silver Hammer Mining | Commerce Resources vs. Reyna Silver Corp | Commerce Resources vs. Guanajuato Silver | Commerce Resources vs. Silver One Resources |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| CEOs Directory Screen CEOs from public companies around the world |