Correlation Between Chesapeake Utilities and One Gas
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and One Gas 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 One Gas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and One Gas, you can compare the effects of market volatilities on Chesapeake Utilities and One Gas 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 One Gas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and One Gas.
Diversification Opportunities for Chesapeake Utilities and One Gas
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Chesapeake and One is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and One Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Gas 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 One Gas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Gas has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and One Gas go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and One Gas
Considering the 90-day investment horizon Chesapeake Utilities is expected to generate 1.07 times less return on investment than One Gas. But when comparing it to its historical volatility, Chesapeake Utilities is 1.02 times less risky than One Gas. It trades about 0.13 of its potential returns per unit of risk. One Gas is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,791 in One Gas on August 27, 2024 and sell it today you would earn a total of 1,996 from holding One Gas or generate 34.47% 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. One Gas
Performance |
| Timeline |
| Chesapeake Utilities |
| One Gas |
Chesapeake Utilities and One Gas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and One Gas
The main advantage of trading using opposite Chesapeake Utilities and One Gas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, One Gas 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 One Gas will offset losses from the drop in One Gas' long position.| Chesapeake Utilities vs. Northwest Natural Gas | Chesapeake Utilities vs. One Gas | Chesapeake Utilities vs. NewJersey Resources | Chesapeake Utilities vs. Spire Inc |
| One Gas vs. Northwest Natural Gas | One Gas vs. Chesapeake Utilities | One Gas vs. NewJersey Resources | One Gas vs. RGC 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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