Correlation Between Dupont De and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both Dupont De and Chesapeake Utilities 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 Dupont De and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Chesapeake Utilities, you can compare the effects of market volatilities on Dupont De and Chesapeake Utilities 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 Dupont De with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Chesapeake Utilities.
Diversification Opportunities for Dupont De and Chesapeake Utilities
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dupont and Chesapeake is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and Dupont De 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 Dupont De Nemours are associated (or correlated) with Chesapeake Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Utilities has no effect on the direction of Dupont De i.e., Dupont De and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between Dupont De and Chesapeake Utilities
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.12 times more return on investment than Chesapeake Utilities. However, Dupont De is 1.12 times more volatile than Chesapeake Utilities. It trades about 0.04 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.03 per unit of risk. If you would invest 6,655 in Dupont De Nemours on August 30, 2024 and sell it today you would earn a total of 1,735 from holding Dupont De Nemours or generate 26.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dupont De Nemours vs. Chesapeake Utilities
Performance |
| Timeline |
| Dupont De Nemours |
| Chesapeake Utilities |
Dupont De and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Chesapeake Utilities
The main advantage of trading using opposite Dupont De and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De position performs unexpectedly, Chesapeake Utilities 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 Chesapeake Utilities will offset losses from the drop in Chesapeake Utilities' long position.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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