Correlation Between Chesapeake Energy and Sapiens International
Can any of the company-specific risk be diversified away by investing in both Chesapeake Energy and Sapiens International 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 Sapiens International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Energy and Sapiens International, you can compare the effects of market volatilities on Chesapeake Energy and Sapiens International 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 Sapiens International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Energy and Sapiens International.
Diversification Opportunities for Chesapeake Energy and Sapiens International
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chesapeake and Sapiens is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Energy and Sapiens International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sapiens International 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 Sapiens International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sapiens International has no effect on the direction of Chesapeake Energy i.e., Chesapeake Energy and Sapiens International go up and down completely randomly.
Pair Corralation between Chesapeake Energy and Sapiens International
If you would invest 6,404 in Chesapeake Energy on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Chesapeake Energy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Chesapeake Energy vs. Sapiens International
Performance |
| Timeline |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Sapiens International |
Chesapeake Energy and Sapiens International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Energy and Sapiens International
The main advantage of trading using opposite Chesapeake Energy and Sapiens International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Energy position performs unexpectedly, Sapiens International 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 Sapiens International will offset losses from the drop in Sapiens International's long position.| Chesapeake Energy vs. Sapiens International | Chesapeake Energy vs. Nextplat Corp | Chesapeake Energy vs. Bill Com Holdings | Chesapeake Energy vs. Diamond Estates Wines |
| Sapiens International vs. Zoom Video Communications | Sapiens International vs. C3 Ai Inc | Sapiens International vs. Shopify | Sapiens International vs. Workday |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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