Correlation Between Chesapeake Utilities and Black Hills
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and Black Hills 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 Utilities and Black Hills into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and Black Hills, you can compare the effects of market volatilities on Chesapeake Utilities and Black Hills 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 Utilities with a short position of Black Hills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and Black Hills.
Diversification Opportunities for Chesapeake Utilities and Black Hills
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chesapeake and Black is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Black Hills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Black Hills and Chesapeake Utilities 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 Utilities are associated (or correlated) with Black Hills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Black Hills has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Black Hills go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and Black Hills
Considering the 90-day investment horizon Chesapeake Utilities is expected to generate 1.05 times more return on investment than Black Hills. However, Chesapeake Utilities is 1.05 times more volatile than Black Hills. It trades about 0.04 of its potential returns per unit of risk. Black Hills is currently generating about -0.12 per unit of risk. If you would invest 12,645 in Chesapeake Utilities on September 14, 2024 and sell it today you would earn a total of 100.00 from holding Chesapeake Utilities or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. Black Hills
Performance |
| Timeline |
| Chesapeake Utilities |
| Black Hills |
Chesapeake Utilities and Black Hills Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and Black Hills
The main advantage of trading using opposite Chesapeake Utilities and Black Hills positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, Black Hills 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 Black Hills will offset losses from the drop in Black Hills' long position.| Chesapeake Utilities vs. Northwest Natural Gas | Chesapeake Utilities vs. One Gas | Chesapeake Utilities vs. NewJersey Resources | Chesapeake Utilities vs. Spire Inc |
| Black Hills vs. NewJersey Resources | Black Hills vs. Northwest Natural Gas | Black Hills vs. Spire Inc | Black Hills vs. Chesapeake Utilities |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |