Correlation Between Chesapeake Energy and Northern Graphite
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Northern Graphite 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 Northern Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Northern Graphite, you can compare the effects of market volatilities on Chesapeake Energy and Northern Graphite 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 Northern Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Northern Graphite.
Diversification Opportunities for Chesapeake Energy and Northern Graphite
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chesapeake and Northern is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Northern Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Graphite 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 Northern Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Graphite has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Northern Graphite go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Northern Graphite
If you would invest 6.40 in Northern Graphite on August 30, 2024 and sell it today you would lose (0.94) from holding Northern Graphite or give up 14.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chesapeake Energy vs. Northern Graphite
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Northern Graphite |
Chesapeake Energy and Northern Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Northern Graphite
The main advantage of trading using opposite Chesapeake Energy and Northern Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Northern Graphite 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 Northern Graphite will offset losses from the drop in Northern Graphite's long position.| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
| Northern Graphite vs. Silver Hammer Mining | Northern Graphite vs. Reyna Silver Corp | Northern Graphite vs. Guanajuato Silver | Northern Graphite vs. Silver One 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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