Correlation Between Chesapeake Finl and Western Asset
Can any of the company-specific risk be diversified away by investing in both Chesapeake Finl and Western Asset 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 Finl and Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Finl Shs and Western Asset Global, you can compare the effects of market volatilities on Chesapeake Finl and Western Asset 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 Finl with a short position of Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Finl and Western Asset.
Diversification Opportunities for Chesapeake Finl and Western Asset
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chesapeake and Western is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Finl Shs and Western Asset Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Global and Chesapeake Finl 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 Finl Shs are associated (or correlated) with Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Global has no effect on the direction of Chesapeake Finl i.e., Chesapeake Finl and Western Asset go up and down completely randomly.
Pair Corralation between Chesapeake Finl and Western Asset
Given the investment horizon of 90 days Chesapeake Finl Shs is expected to generate 1.72 times more return on investment than Western Asset. However, Chesapeake Finl is 1.72 times more volatile than Western Asset Global. It trades about 0.06 of its potential returns per unit of risk. Western Asset Global is currently generating about -0.04 per unit of risk. If you would invest 1,864 in Chesapeake Finl Shs on September 3, 2024 and sell it today you would earn a total of 20.00 from holding Chesapeake Finl Shs or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Chesapeake Finl Shs vs. Western Asset Global
Performance |
| Timeline |
| Chesapeake Finl Shs |
| Western Asset Global |
Chesapeake Finl and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chesapeake Finl and Western Asset
The main advantage of trading using opposite Chesapeake Finl and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Finl position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Chesapeake Finl vs. Western Asset Global | Chesapeake Finl vs. Invesco Trust For | Chesapeake Finl vs. Logan Ridge Finance | Chesapeake Finl vs. Invesco Advantage MIT |
| Western Asset vs. Western Asset High | Western Asset vs. Western Asset Global | Western Asset vs. European Equity Closed | Western Asset vs. Doubleline Opportunistic Credit |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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