Correlation Between Chesapeake Energy and Dynacor Gold
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Dynacor 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 Dynacor 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 Dynacor Gold Mines, you can compare the effects of market volatilities on Chesapeake Energy and Dynacor 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 Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Dynacor Gold.
Diversification Opportunities for Chesapeake Energy and Dynacor Gold
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and Dynacor is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Dynacor Gold Mines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynacor Gold Mines 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 Dynacor Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynacor Gold Mines has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Dynacor Gold go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Dynacor Gold
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the Dynacor Gold. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 1.55 times less risky than Dynacor Gold. The stock trades about 0.0 of its potential returns per unit of risk. The Dynacor Gold Mines is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 213.00 in Dynacor Gold Mines on August 31, 2024 and sell it today you would earn a total of 220.00 from holding Dynacor Gold Mines or generate 103.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.71% |
| Values | Daily Returns |
Chesapeake Energy vs. Dynacor Gold Mines
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Dynacor Gold Mines |
Chesapeake Energy and Dynacor Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Dynacor Gold
The main advantage of trading using opposite Chesapeake Energy and Dynacor Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Dynacor 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 Dynacor Gold will offset losses from the drop in Dynacor Gold's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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