Correlation Between Chesapeake Energy and K92 Mining
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and K92 Mining 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 K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and K92 Mining, you can compare the effects of market volatilities on Chesapeake Energy and K92 Mining 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 K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and K92 Mining.
Diversification Opportunities for Chesapeake Energy and K92 Mining
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Chesapeake and K92 is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and K92 Mining go up and down completely randomly.
Pair Corralation between Chesapeake Energy and K92 Mining
Assuming the 90 days horizon Chesapeake Energy is expected to under-perform the K92 Mining. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Energy is 1.51 times less risky than K92 Mining. The stock trades about 0.0 of its potential returns per unit of risk. The K92 Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 606.00 in K92 Mining on August 31, 2024 and sell it today you would earn a total of 38.00 from holding K92 Mining or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 91.4% |
| Values | Daily Returns |
Chesapeake Energy vs. K92 Mining
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| K92 Mining |
Chesapeake Energy and K92 Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and K92 Mining
The main advantage of trading using opposite Chesapeake Energy and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining'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 |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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