Correlation Between Tradegate and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both Tradegate 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 Tradegate and Chesapeake Utilities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Chesapeake Utilities, you can compare the effects of market volatilities on Tradegate 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 Tradegate with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Chesapeake Utilities.
Diversification Opportunities for Tradegate and Chesapeake Utilities
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tradegate and Chesapeake is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and Tradegate 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 Tradegate AG Wertpapierhandelsbank 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 Tradegate i.e., Tradegate and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between Tradegate and Chesapeake Utilities
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to generate 0.45 times more return on investment than Chesapeake Utilities. However, Tradegate AG Wertpapierhandelsbank is 2.2 times less risky than Chesapeake Utilities. It trades about 0.0 of its potential returns per unit of risk. Chesapeake Utilities is currently generating about -0.42 per unit of risk. If you would invest 8,850 in Tradegate AG Wertpapierhandelsbank on September 23, 2024 and sell it today you would earn a total of 0.00 from holding Tradegate AG Wertpapierhandelsbank or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Chesapeake Utilities
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Chesapeake Utilities |
Tradegate and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Chesapeake Utilities
The main advantage of trading using opposite Tradegate and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate 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.| Tradegate vs. Morgan Stanley | Tradegate vs. Morgan Stanley | Tradegate vs. The Charles Schwab | Tradegate vs. The Goldman Sachs |
| Chesapeake Utilities vs. Tradegate AG Wertpapierhandelsbank | Chesapeake Utilities vs. FUYO GENERAL LEASE | Chesapeake Utilities vs. National Bank Holdings | Chesapeake Utilities vs. The Hanover Insurance |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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