Correlation Between Emerald Growth and The Chesapeake
Can any of the company-specific risk be diversified away by investing in both Emerald Growth and The Chesapeake 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 Emerald Growth and The Chesapeake into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerald Growth Fund and The Chesapeake Growth, you can compare the effects of market volatilities on Emerald Growth and The Chesapeake 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 Emerald Growth with a short position of The Chesapeake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerald Growth and The Chesapeake.
Diversification Opportunities for Emerald Growth and The Chesapeake
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Emerald and The is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Emerald Growth Fund and The Chesapeake Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Growth and Emerald Growth 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 Emerald Growth Fund are associated (or correlated) with The Chesapeake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Growth has no effect on the direction of Emerald Growth i.e., Emerald Growth and The Chesapeake go up and down completely randomly.
Pair Corralation between Emerald Growth and The Chesapeake
Assuming the 90 days horizon Emerald Growth Fund is expected to under-perform the The Chesapeake. In addition to that, Emerald Growth is 1.72 times more volatile than The Chesapeake Growth. It trades about -0.01 of its total potential returns per unit of risk. The Chesapeake Growth is currently generating about 0.04 per unit of volatility. If you would invest 4,107 in The Chesapeake Growth on January 15, 2025 and sell it today you would earn a total of 692.00 from holding The Chesapeake Growth or generate 16.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.6% |
| Values | Daily Returns |
Emerald Growth Fund vs. The Chesapeake Growth
Performance |
| Timeline |
| Emerald Growth |
| Chesapeake Growth |
Emerald Growth and The Chesapeake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerald Growth and The Chesapeake
The main advantage of trading using opposite Emerald Growth and The Chesapeake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerald Growth position performs unexpectedly, The Chesapeake 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 The Chesapeake will offset losses from the drop in The Chesapeake's long position.| Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Growth Fund | Emerald Growth vs. Emerald Banking And | Emerald Growth vs. Nuveen Small Cap |
| The Chesapeake vs. Emerald Growth Fund | The Chesapeake vs. Victory Rs Partners | The Chesapeake vs. Hotchkis Wiley Large | The Chesapeake vs. Chase Growth Fund |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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