Correlation Between Chesapeake Energy and Cambridge Capital
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Cambridge Capital 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 Cambridge Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Cambridge Capital Holdings, you can compare the effects of market volatilities on Chesapeake Energy and Cambridge Capital 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 Cambridge Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Cambridge Capital.
Diversification Opportunities for Chesapeake Energy and Cambridge Capital
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and Cambridge is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Cambridge Capital Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambridge Capital 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 Cambridge Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambridge Capital has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Cambridge Capital go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Cambridge Capital
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the Cambridge Capital. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 21.34 times less risky than Cambridge Capital. The stock trades about -0.01 of its potential returns per unit of risk. The Cambridge Capital Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Cambridge Capital Holdings on August 30, 2024 and sell it today you would lose (30.00) from holding Cambridge Capital Holdings or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.92% |
| Values | Daily Returns |
Chesapeake Energy vs. Cambridge Capital Holdings
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Cambridge Capital |
Chesapeake Energy and Cambridge Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Cambridge Capital
The main advantage of trading using opposite Chesapeake Energy and Cambridge Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Cambridge Capital 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 Cambridge Capital will offset losses from the drop in Cambridge Capital's long position.| Chesapeake Energy vs. Lindblad Expeditions Holdings | Chesapeake Energy vs. KVH Industries | Chesapeake Energy vs. Skillful Craftsman Education | Chesapeake Energy vs. Old Dominion Freight |
| Cambridge Capital vs. International Tower Hill | Cambridge Capital vs. Allegiant Gold | Cambridge Capital vs. Austin Gold Corp | Cambridge Capital vs. Angold 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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