Correlation Between Chesapeake Energy and Dynaresource
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Dynaresource 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 Dynaresource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Dynaresource, you can compare the effects of market volatilities on Chesapeake Energy and Dynaresource 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 Dynaresource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Dynaresource.
Diversification Opportunities for Chesapeake Energy and Dynaresource
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and Dynaresource is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Dynaresource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynaresource 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 Dynaresource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynaresource has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Dynaresource go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Dynaresource
Assuming the 90 days horizon Chesapeake Energy is expected to generate 0.42 times more return on investment than Dynaresource. However, Chesapeake Energy is 2.37 times less risky than Dynaresource. It trades about -0.01 of its potential returns per unit of risk. Dynaresource is currently generating about -0.01 per unit of risk. If you would invest 8,052 in Chesapeake Energy on September 2, 2024 and sell it today you would lose (1,648) from holding Chesapeake Energy or give up 20.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 91.53% |
| Values | Daily Returns |
Chesapeake Energy vs. Dynaresource
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Dynaresource |
Chesapeake Energy and Dynaresource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Dynaresource
The main advantage of trading using opposite Chesapeake Energy and Dynaresource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Dynaresource 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 Dynaresource will offset losses from the drop in Dynaresource's long position.| Chesapeake Energy vs. Sphere Entertainment Co | Chesapeake Energy vs. Morgan Stanley | Chesapeake Energy vs. Nasdaq Inc | Chesapeake Energy vs. Alvarium Tiedemann Holdings |
| Dynaresource vs. Endeavour Silver Corp | Dynaresource vs. Metalla Royalty Streaming | Dynaresource vs. New Pacific Metals | Dynaresource vs. Hecla Mining |
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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