Correlation Between Chesapeake Granite and US Energy
Can any of the company-specific risk be diversified away by investing in both Chesapeake Granite and US Energy 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 US Energy 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 US Energy Corp, you can compare the effects of market volatilities on Chesapeake Granite and US Energy 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 US Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Granite and US Energy.
Diversification Opportunities for Chesapeake Granite and US Energy
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Chesapeake and USEG is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and US Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Energy Corp 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 US Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Energy Corp has no effect on the direction of Chesapeake Granite i.e., Chesapeake Granite and US Energy go up and down completely randomly.
Pair Corralation between Chesapeake Granite and US Energy
If you would invest 107.00 in US Energy Corp on September 1, 2024 and sell it today you would earn a total of 78.00 from holding US Energy Corp or generate 72.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 0.79% |
| Values | Daily Returns |
Chesapeake Granite Wash vs. US Energy Corp
Performance |
| Timeline |
| Chesapeake Granite Wash |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| US Energy Corp |
Chesapeake Granite and US Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Granite and US Energy
The main advantage of trading using opposite Chesapeake Granite and US Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Granite position performs unexpectedly, US Energy 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 US Energy will offset losses from the drop in US Energy'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 |
| US Energy vs. PEDEVCO Corp | US Energy vs. Houston American Energy | US Energy vs. PHX Minerals | US Energy vs. Trio Petroleum 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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