Correlation Between Chesapeake Energy and Ceapro
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Ceapro 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 Ceapro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Ceapro Inc, you can compare the effects of market volatilities on Chesapeake Energy and Ceapro 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 Ceapro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Ceapro.
Diversification Opportunities for Chesapeake Energy and Ceapro
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chesapeake and Ceapro is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Ceapro Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ceapro Inc 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 Ceapro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ceapro Inc has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Ceapro go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Ceapro
Assuming the 90 days horizon Chesapeake Energy is expected to generate 135.03 times less return on investment than Ceapro. But when comparing it to its historical volatility, Chesapeake Energy is 33.9 times less risky than Ceapro. It trades about 0.02 of its potential returns per unit of risk. Ceapro Inc is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Ceapro Inc on September 2, 2024 and sell it today you would earn a total of 573.00 from holding Ceapro Inc or generate 2865.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 80.1% |
| Values | Daily Returns |
Chesapeake Energy vs. Ceapro Inc
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Ceapro Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Energy and Ceapro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Ceapro
The main advantage of trading using opposite Chesapeake Energy and Ceapro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Ceapro 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 Ceapro will offset losses from the drop in Ceapro'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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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