Correlation Between Chesapeake Energy and HighPeak Energy
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and HighPeak Energy 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 HighPeak Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and HighPeak Energy, you can compare the effects of market volatilities on Chesapeake Energy and HighPeak Energy 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 HighPeak Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and HighPeak Energy.
Diversification Opportunities for Chesapeake Energy and HighPeak Energy
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Chesapeake and HighPeak is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and HighPeak Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HighPeak Energy 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 HighPeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HighPeak Energy has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and HighPeak Energy go up and down completely randomly.
Pair Corralation between Chesapeake Energy and HighPeak Energy
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the HighPeak Energy. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 3.6 times less risky than HighPeak Energy. The stock trades about -0.02 of its potential returns per unit of risk. The HighPeak Energy is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,451 in HighPeak Energy on August 30, 2024 and sell it today you would lose (991.00) from holding HighPeak Energy or give up 68.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.73% |
| Values | Daily Returns |
Chesapeake Energy vs. HighPeak Energy
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| HighPeak Energy |
Chesapeake Energy and HighPeak Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and HighPeak Energy
The main advantage of trading using opposite Chesapeake Energy and HighPeak Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, HighPeak Energy 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 HighPeak Energy will offset losses from the drop in HighPeak Energy's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| HighPeak Energy vs. Antero Resources Corp | HighPeak Energy vs. Empire Petroleum Corp | HighPeak Energy vs. Permian Resources | HighPeak Energy vs. SM 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Commodity Directory Find actively traded commodities issued by global exchanges |