Correlation Between Chesapeake Granite and San Juan
Can any of the company-specific risk be diversified away by investing in both Chesapeake Granite and San Juan 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 Granite and San Juan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Granite Wash and San Juan Basin, you can compare the effects of market volatilities on Chesapeake Granite and San Juan 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 Granite with a short position of San Juan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Granite and San Juan.
Diversification Opportunities for Chesapeake Granite and San Juan
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Chesapeake and San is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and San Juan Basin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on San Juan Basin and Chesapeake Granite 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 Granite Wash are associated (or correlated) with San Juan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of San Juan Basin has no effect on the direction of Chesapeake Granite i.e., Chesapeake Granite and San Juan go up and down completely randomly.
Pair Corralation between Chesapeake Granite and San Juan
If you would invest 118.00 in Chesapeake Granite Wash on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Chesapeake Granite Wash or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Chesapeake Granite Wash vs. San Juan Basin
Performance |
| Timeline |
| Chesapeake Granite Wash |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| San Juan Basin |
Chesapeake Granite and San Juan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Granite and San Juan
The main advantage of trading using opposite Chesapeake Granite and San Juan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Granite position performs unexpectedly, San Juan 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 San Juan will offset losses from the drop in San Juan's long position.| Chesapeake Granite vs. VOC Energy Trust | Chesapeake Granite vs. MV Oil Trust | Chesapeake Granite vs. Mesa Royalty Trust | Chesapeake Granite vs. Cross Timbers Royalty |
| San Juan vs. Sabine Royalty Trust | San Juan vs. Permian Basin Royalty | San Juan vs. Cross Timbers Royalty | San Juan vs. Mesa Royalty Trust |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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