Correlation Between GOLD ROAD and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Chesapeake Utilities, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Chesapeake Utilities.
Diversification Opportunities for GOLD ROAD and Chesapeake Utilities
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GOLD and Chesapeake is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between GOLD ROAD and Chesapeake Utilities
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 1.01 times more return on investment than Chesapeake Utilities. However, GOLD ROAD is 1.01 times more volatile than Chesapeake Utilities. It trades about 0.2 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about -0.24 per unit of risk. If you would invest 124.00 in GOLD ROAD RES on October 15, 2024 and sell it today you would earn a total of 5.00 from holding GOLD ROAD RES or generate 4.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Chesapeake Utilities
Performance |
| Timeline |
| GOLD ROAD RES |
| Chesapeake Utilities |
GOLD ROAD and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Chesapeake Utilities
The main advantage of trading using opposite GOLD ROAD and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.| GOLD ROAD vs. MOVIE GAMES SA | GOLD ROAD vs. PLAYTECH | GOLD ROAD vs. JAPAN TOBACCO UNSPADR12 | GOLD ROAD vs. British American Tobacco |
| Chesapeake Utilities vs. Zoom Video Communications | Chesapeake Utilities vs. Charter Communications | Chesapeake Utilities vs. Comba Telecom Systems | Chesapeake Utilities vs. ecotel communication ag |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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