Correlation Between Chesapeake Gold and Eastern Platinum
Can any of the company-specific risk be diversified away by investing in both Chesapeake Gold and Eastern Platinum 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 Gold and Eastern Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Gold Corp and Eastern Platinum Limited, you can compare the effects of market volatilities on Chesapeake Gold and Eastern Platinum 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 Gold with a short position of Eastern Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Gold and Eastern Platinum.
Diversification Opportunities for Chesapeake Gold and Eastern Platinum
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and Eastern is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Gold Corp and Eastern Platinum Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Platinum and Chesapeake Gold 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 Gold Corp are associated (or correlated) with Eastern Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Platinum has no effect on the direction of Chesapeake Gold i.e., Chesapeake Gold and Eastern Platinum go up and down completely randomly.
Pair Corralation between Chesapeake Gold and Eastern Platinum
Assuming the 90 days horizon Chesapeake Gold Corp is expected to under-perform the Eastern Platinum. But the otc stock apears to be less risky and, when comparing its historical volatility, Chesapeake Gold Corp is 1.38 times less risky than Eastern Platinum. The otc stock trades about 0.0 of its potential returns per unit of risk. The Eastern Platinum Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11.00 in Eastern Platinum Limited on September 14, 2024 and sell it today you would lose (1.00) from holding Eastern Platinum Limited or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Gold Corp vs. Eastern Platinum Limited
Performance |
| Timeline |
| Chesapeake Gold Corp |
| Eastern Platinum |
Chesapeake Gold and Eastern Platinum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Gold and Eastern Platinum
The main advantage of trading using opposite Chesapeake Gold and Eastern Platinum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Gold position performs unexpectedly, Eastern Platinum 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 Eastern Platinum will offset losses from the drop in Eastern Platinum's long position.| Chesapeake Gold vs. Advantage Solutions | Chesapeake Gold vs. Atlas Corp | Chesapeake Gold vs. PureCycle Technologies | Chesapeake Gold vs. WM Technology |
| Eastern Platinum vs. Thunder Mountain Gold | Eastern Platinum vs. Chesapeake Gold Corp | Eastern Platinum vs. AbraSilver Resource Corp | Eastern Platinum vs. GoGold Resources |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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