Correlation Between Chesapeake Energy and Conquest Resources
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Conquest Resources 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 Conquest Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Conquest Resources Limited, you can compare the effects of market volatilities on Chesapeake Energy and Conquest Resources 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 Conquest Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Conquest Resources.
Diversification Opportunities for Chesapeake Energy and Conquest Resources
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Conquest is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Conquest Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquest 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 Conquest Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquest Resources has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Conquest Resources go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Conquest Resources
If you would invest 1.75 in Conquest Resources Limited on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Conquest Resources Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chesapeake Energy vs. Conquest Resources Limited
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
| Conquest Resources |
Chesapeake Energy and Conquest Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Conquest Resources
The main advantage of trading using opposite Chesapeake Energy and Conquest Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Conquest Resources 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 Conquest Resources will offset losses from the drop in Conquest Resources' long position.The idea behind Chesapeake Energy and Conquest Resources Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Conquest Resources vs. Ascendant Resources | Conquest Resources vs. Cantex Mine Development | Conquest Resources vs. Amarc Resources | Conquest Resources vs. Sterling Metals Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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