Correlation Between Intel and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Intel and Chesapeake Energy 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 Intel and Chesapeake Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and Chesapeake Energy, you can compare the effects of market volatilities on Intel and Chesapeake Energy 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 Intel with a short position of Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and Chesapeake Energy.
Diversification Opportunities for Intel and Chesapeake Energy
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Intel and Chesapeake is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Intel and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Energy and Intel 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 Intel are associated (or correlated) with Chesapeake Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Energy has no effect on the direction of Intel i.e., Intel and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Intel and Chesapeake Energy
Given the investment horizon of 90 days Intel is expected to generate 1.39 times more return on investment than Chesapeake Energy. However, Intel is 1.39 times more volatile than Chesapeake Energy. It trades about -0.03 of its potential returns per unit of risk. Chesapeake Energy is currently generating about -0.08 per unit of risk. If you would invest 3,010 in Intel on September 1, 2024 and sell it today you would lose (605.00) from holding Intel or give up 20.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 67.46% |
| Values | Daily Returns |
Intel vs. Chesapeake Energy
Performance |
| Timeline |
| Intel |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Intel and Chesapeake Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and Chesapeake Energy
The main advantage of trading using opposite Intel and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, Chesapeake Energy 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 Energy will offset losses from the drop in Chesapeake Energy's long position.| Intel vs. NXP Semiconductors NV | Intel vs. GSI Technology | Intel vs. MaxLinear | Intel vs. Texas Instruments Incorporated |
| Chesapeake Energy vs. NGL Energy Partners | Chesapeake Energy vs. Global Partners LP | Chesapeake Energy vs. Crescent Energy Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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