Correlation Between Chesapeake Energy and Critical Elements
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Critical Elements 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 Critical Elements into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Critical Elements, you can compare the effects of market volatilities on Chesapeake Energy and Critical Elements 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 Critical Elements. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Critical Elements.
Diversification Opportunities for Chesapeake Energy and Critical Elements
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and Critical is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Critical Elements in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Critical Elements 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 Critical Elements. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Critical Elements has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Critical Elements go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Critical Elements
If you would invest 6,250 in Chesapeake Energy on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Chesapeake Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chesapeake Energy vs. Critical Elements
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Critical Elements |
Chesapeake Energy and Critical Elements Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Critical Elements
The main advantage of trading using opposite Chesapeake Energy and Critical Elements positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Critical Elements 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 Critical Elements will offset losses from the drop in Critical Elements' long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Critical Elements vs. Argosy Minerals Limited | Critical Elements vs. Aurelia Metals Limited | Critical Elements vs. Artemis Resources | Critical Elements vs. Ascendant 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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