Correlation Between Space Communication and Chesapeake Energy
Can any of the company-specific risk be diversified away by investing in both Space Communication 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 Space Communication and Chesapeake Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Space Communication and Chesapeake Energy, you can compare the effects of market volatilities on Space Communication 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 Space Communication with a short position of Chesapeake Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Space Communication and Chesapeake Energy.
Diversification Opportunities for Space Communication and Chesapeake Energy
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Space and Chesapeake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Space Communication and Chesapeake Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Energy and Space Communication 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 Space Communication 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 Space Communication i.e., Space Communication and Chesapeake Energy go up and down completely randomly.
Pair Corralation between Space Communication and Chesapeake Energy
Assuming the 90 days horizon Space Communication is expected to under-perform the Chesapeake Energy. In addition to that, Space Communication is 2.15 times more volatile than Chesapeake Energy. It trades about -0.05 of its total potential returns per unit of risk. Chesapeake Energy is currently generating about 0.01 per unit of volatility. If you would invest 6,500 in Chesapeake Energy on September 12, 2024 and sell it today you would lose (96.00) from holding Chesapeake Energy or give up 1.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 87.13% |
| Values | Daily Returns |
Space Communication vs. Chesapeake Energy
Performance |
| Timeline |
| Space Communication |
| Chesapeake Energy |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Space Communication and Chesapeake Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Space Communication and Chesapeake Energy
The main advantage of trading using opposite Space Communication and Chesapeake Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Space Communication 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.| Space Communication vs. National Beverage Corp | Space Communication vs. Xponential Fitness | Space Communication vs. Alvotech | Space Communication vs. Celsius Holdings |
| Chesapeake Energy vs. Steven Madden | Chesapeake Energy vs. The Joint Corp | Chesapeake Energy vs. Under Armour C | Chesapeake Energy vs. Xtant Medical Holdings |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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