Correlation Between Naturgy Energy and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both Naturgy Energy 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 Naturgy Energy and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naturgy Energy Group and Chesapeake Utilities, you can compare the effects of market volatilities on Naturgy Energy 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 Naturgy Energy with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naturgy Energy and Chesapeake Utilities.
Diversification Opportunities for Naturgy Energy and Chesapeake Utilities
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Naturgy and Chesapeake is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Naturgy Energy Group and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and Naturgy Energy 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 Naturgy Energy Group 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 Naturgy Energy i.e., Naturgy Energy and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between Naturgy Energy and Chesapeake Utilities
Assuming the 90 days horizon Naturgy Energy Group is expected to under-perform the Chesapeake Utilities. In addition to that, Naturgy Energy is 1.4 times more volatile than Chesapeake Utilities. It trades about -0.01 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.09 per unit of volatility. If you would invest 9,285 in Chesapeake Utilities on September 14, 2024 and sell it today you would earn a total of 2,815 from holding Chesapeake Utilities or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naturgy Energy Group vs. Chesapeake Utilities
Performance |
| Timeline |
| Naturgy Energy Group |
| Chesapeake Utilities |
Naturgy Energy and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naturgy Energy and Chesapeake Utilities
The main advantage of trading using opposite Naturgy Energy and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naturgy Energy 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.| Naturgy Energy vs. CenterPoint Energy | Naturgy Energy vs. Snam SpA | Naturgy Energy vs. ENN Energy Holdings | Naturgy Energy vs. ENN Energy Holdings |
| Chesapeake Utilities vs. Gaztransport Technigaz SA | Chesapeake Utilities vs. Nok Airlines PCL | Chesapeake Utilities vs. Big 5 Sporting | Chesapeake Utilities vs. DICKS Sporting Goods |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk |