Correlation Between Compagnie Plastic and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both Compagnie Plastic 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 Compagnie Plastic and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Plastic Omnium and Chesapeake Utilities, you can compare the effects of market volatilities on Compagnie Plastic 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 Compagnie Plastic with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Plastic and Chesapeake Utilities.
Diversification Opportunities for Compagnie Plastic and Chesapeake Utilities
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Compagnie and Chesapeake is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Plastic Omnium and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and Compagnie Plastic 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 Compagnie Plastic Omnium 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 Compagnie Plastic i.e., Compagnie Plastic and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between Compagnie Plastic and Chesapeake Utilities
Assuming the 90 days horizon Compagnie Plastic Omnium is expected to under-perform the Chesapeake Utilities. In addition to that, Compagnie Plastic is 1.99 times more volatile than Chesapeake Utilities. It trades about -0.06 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.16 per unit of volatility. If you would invest 9,783 in Chesapeake Utilities on August 28, 2024 and sell it today you would earn a total of 2,817 from holding Chesapeake Utilities or generate 28.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Plastic Omnium vs. Chesapeake Utilities
Performance |
| Timeline |
| Compagnie Plastic Omnium |
| Chesapeake Utilities |
Compagnie Plastic and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Plastic and Chesapeake Utilities
The main advantage of trading using opposite Compagnie Plastic and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Plastic 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.| Compagnie Plastic vs. Superior Plus Corp | Compagnie Plastic vs. NMI Holdings | Compagnie Plastic vs. Origin Agritech | Compagnie Plastic vs. SIVERS SEMICONDUCTORS AB |
| Chesapeake Utilities vs. Playtech plc | Chesapeake Utilities vs. Lion Biotechnologies | Chesapeake Utilities vs. Cal Maine Foods | Chesapeake Utilities vs. AUSNUTRIA DAIRY |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |