Correlation Between Chesapeake Energy and Global Partners
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Global Partners 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 Global Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Global Partners LP, you can compare the effects of market volatilities on Chesapeake Energy and Global Partners 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 Global Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Global Partners.
Diversification Opportunities for Chesapeake Energy and Global Partners
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chesapeake and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Global Partners LP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partners LP 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 Global Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partners LP has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Global Partners go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Global Partners
If you would invest 2,569 in Global Partners LP on August 26, 2024 and sell it today you would earn a total of 42.00 from holding Global Partners LP or generate 1.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Chesapeake Energy vs. Global Partners LP
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Global Partners LP |
Chesapeake Energy and Global Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Global Partners
The main advantage of trading using opposite Chesapeake Energy and Global Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Global Partners 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 Global Partners will offset losses from the drop in Global Partners' 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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