Correlation Between Chesapeake Energy and Nevada Copper
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Nevada Copper 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 Nevada Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Nevada Copper Corp, you can compare the effects of market volatilities on Chesapeake Energy and Nevada Copper 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 Nevada Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Nevada Copper.
Diversification Opportunities for Chesapeake Energy and Nevada Copper
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chesapeake and Nevada is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Nevada Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nevada Copper Corp 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 Nevada Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nevada Copper Corp has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Nevada Copper go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Nevada Copper
If you would invest 1.82 in Nevada Copper Corp on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Nevada Copper Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Energy vs. Nevada Copper Corp
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Nevada Copper Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Energy and Nevada Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Nevada Copper
The main advantage of trading using opposite Chesapeake Energy and Nevada Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Nevada Copper 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 Nevada Copper will offset losses from the drop in Nevada Copper's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Nevada Copper vs. Ero Copper Corp | Nevada Copper vs. Copperbank Resources Corp | Nevada Copper vs. Copper Mountain Mining | Nevada Copper vs. CopperCorp 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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