Correlation Between Chesapeake Energy and Granite Ridge
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Granite Ridge 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 Granite Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Granite Ridge Resources, you can compare the effects of market volatilities on Chesapeake Energy and Granite Ridge 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 Granite Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Granite Ridge.
Diversification Opportunities for Chesapeake Energy and Granite Ridge
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Chesapeake and Granite is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge Resources 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 Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Granite Ridge go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Granite Ridge
If you would invest 596.00 in Granite Ridge Resources on August 31, 2024 and sell it today you would earn a total of 59.00 from holding Granite Ridge Resources or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Chesapeake Energy vs. Granite Ridge Resources
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Granite Ridge Resources |
Chesapeake Energy and Granite Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Granite Ridge
The main advantage of trading using opposite Chesapeake Energy and Granite Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Granite Ridge 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 Granite Ridge will offset losses from the drop in Granite Ridge's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Granite Ridge vs. Epsilon Energy | Granite Ridge vs. Gulfport Energy Operating | Granite Ridge vs. North European Oil | Granite Ridge vs. PHX Minerals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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