Correlation Between Chesapeake Utilities and UGI Corp
Can any of the company-specific risk be diversified away by investing in both Chesapeake Utilities and UGI Corp 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 UGI Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Utilities and UGI Corp Unit, you can compare the effects of market volatilities on Chesapeake Utilities and UGI Corp 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 UGI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Utilities and UGI Corp.
Diversification Opportunities for Chesapeake Utilities and UGI Corp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Chesapeake and UGI is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and UGI Corp Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UGI Corp Unit 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 UGI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UGI Corp Unit has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and UGI Corp go up and down completely randomly.
Pair Corralation between Chesapeake Utilities and UGI Corp
If you would invest 11,840 in Chesapeake Utilities on October 20, 2024 and sell it today you would earn a total of 543.00 from holding Chesapeake Utilities or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Chesapeake Utilities vs. UGI Corp Unit
Performance |
| Timeline |
| Chesapeake Utilities |
| UGI Corp Unit |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Chesapeake Utilities and UGI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Utilities and UGI Corp
The main advantage of trading using opposite Chesapeake Utilities and UGI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Utilities position performs unexpectedly, UGI Corp 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 UGI Corp will offset losses from the drop in UGI Corp's long position.| Chesapeake Utilities vs. Northwest Natural Gas | Chesapeake Utilities vs. One Gas | Chesapeake Utilities vs. NewJersey Resources | Chesapeake Utilities vs. Spire Inc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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