Correlation Between Chesapeake Energy and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Park Hotels 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 Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Park Hotels Resorts, you can compare the effects of market volatilities on Chesapeake Energy and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Park Hotels.
Diversification Opportunities for Chesapeake Energy and Park Hotels
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and Park is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Park Hotels go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Park Hotels
If you would invest 1,511 in Park Hotels Resorts on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Park Hotels Resorts or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chesapeake Energy vs. Park Hotels Resorts
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
| Park Hotels Resorts |
Chesapeake Energy and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Park Hotels
The main advantage of trading using opposite Chesapeake Energy and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Chesapeake Energy vs. Jabil Circuit | Chesapeake Energy vs. Sonos Inc | Chesapeake Energy vs. NETGEAR | Chesapeake Energy vs. Monster Beverage Corp |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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