Correlation Between Chesapeake Energy and Imaflex
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Imaflex 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 Imaflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Imaflex, you can compare the effects of market volatilities on Chesapeake Energy and Imaflex 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 Imaflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Imaflex.
Diversification Opportunities for Chesapeake Energy and Imaflex
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Imaflex is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Imaflex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imaflex 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 Imaflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imaflex has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Imaflex go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Imaflex
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the Imaflex. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 1.28 times less risky than Imaflex. The stock trades about -0.11 of its potential returns per unit of risk. The Imaflex is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 64.00 in Imaflex on August 28, 2024 and sell it today you would earn a total of 46.00 from holding Imaflex or generate 71.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 69.6% |
| Values | Daily Returns |
Chesapeake Energy vs. Imaflex
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Imaflex |
Chesapeake Energy and Imaflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Imaflex
The main advantage of trading using opposite Chesapeake Energy and Imaflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Imaflex 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 Imaflex will offset losses from the drop in Imaflex's long position.| Chesapeake Energy vs. Amgen Inc | Chesapeake Energy vs. Viemed Healthcare | Chesapeake Energy vs. Willamette Valley Vineyards | Chesapeake Energy vs. Microbot Medical |
| Imaflex vs. Ascendant Resources | Imaflex vs. Cantex Mine Development | Imaflex vs. Amarc Resources | Imaflex vs. Sterling Metals Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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