Correlation Between Chesapeake Energy and Grande Portage
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Grande Portage 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 Grande Portage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Grande Portage Resources, you can compare the effects of market volatilities on Chesapeake Energy and Grande Portage 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 Grande Portage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Grande Portage.
Diversification Opportunities for Chesapeake Energy and Grande Portage
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Grande is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Grande Portage Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grande Portage 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 Grande Portage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grande Portage Resources has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Grande Portage go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Grande Portage
Assuming the 90 days horizon Chesapeake Energy is expected to generate 53.49 times less return on investment than Grande Portage. But when comparing it to its historical volatility, Chesapeake Energy is 3.4 times less risky than Grande Portage. It trades about 0.0 of its potential returns per unit of risk. Grande Portage Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 14.00 in Grande Portage Resources on August 31, 2024 and sell it today you would earn a total of 1.00 from holding Grande Portage Resources or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 88.77% |
| Values | Daily Returns |
Chesapeake Energy vs. Grande Portage Resources
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Grande Portage Resources |
Chesapeake Energy and Grande Portage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Grande Portage
The main advantage of trading using opposite Chesapeake Energy and Grande Portage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Grande Portage 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 Grande Portage will offset losses from the drop in Grande Portage's long position.| Chesapeake Energy vs. Boyd Gaming | Chesapeake Energy vs. Dalata Hotel Group | Chesapeake Energy vs. Ryman Hospitality Properties | Chesapeake Energy vs. Summit Materials |
| Grande Portage vs. South32 Limited | Grande Portage vs. NioCorp Developments Ltd | Grande Portage vs. HUMANA INC | Grande Portage vs. SCOR PK |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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