Correlation Between Chesapeake Energy and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Chesapeake 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 Chesapeake 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 Chesapeake Energy, you can compare the effects of market volatilities on Chesapeake Energy and Chesapeake 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 Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Chesapeake Energy.
Diversification Opportunities for Chesapeake Energy and Chesapeake Energy
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Chesapeake is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake 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 Chesapeake Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Energy has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Chesapeake Energy
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the Chesapeake Energy. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 64.95 times less risky than Chesapeake Energy. The stock trades about -0.02 of its potential returns per unit of risk. The Chesapeake Energy is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 8,938 in Chesapeake Energy on August 26, 2024 and sell it today you would lose (1,749) from holding Chesapeake Energy or give up 19.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 54.9% |
| Values | Daily Returns |
Chesapeake Energy vs. Chesapeake Energy
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Chesapeake Energy and Chesapeake Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Chesapeake Energy
The main advantage of trading using opposite Chesapeake Energy and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Chesapeake 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 Chesapeake Energy will offset losses from the drop in Chesapeake Energy's long position.| Chesapeake Energy vs. European Wax Center | Chesapeake Energy vs. Weyco Group | Chesapeake Energy vs. Postal Realty Trust | Chesapeake Energy vs. Virco Manufacturing |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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