Correlation Between ENN Energy and Chesapeake Utilities
Can any of the company-specific risk be diversified away by investing in both ENN 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 ENN 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 ENN Energy Holdings and Chesapeake Utilities, you can compare the effects of market volatilities on ENN 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 ENN Energy with a short position of Chesapeake Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENN Energy and Chesapeake Utilities.
Diversification Opportunities for ENN Energy and Chesapeake Utilities
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENN and Chesapeake is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding ENN Energy Holdings and Chesapeake Utilities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Utilities and ENN 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 ENN Energy Holdings 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 ENN Energy i.e., ENN Energy and Chesapeake Utilities go up and down completely randomly.
Pair Corralation between ENN Energy and Chesapeake Utilities
Assuming the 90 days horizon ENN Energy Holdings is expected to under-perform the Chesapeake Utilities. In addition to that, ENN Energy is 3.1 times more volatile than Chesapeake Utilities. It trades about -0.03 of its total potential returns per unit of risk. Chesapeake Utilities is currently generating about 0.02 per unit of volatility. If you would invest 12,636 in Chesapeake Utilities on September 1, 2024 and sell it today you would earn a total of 539.00 from holding Chesapeake Utilities or generate 4.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 77.69% |
| Values | Daily Returns |
ENN Energy Holdings vs. Chesapeake Utilities
Performance |
| Timeline |
| ENN Energy Holdings |
| Chesapeake Utilities |
ENN Energy and Chesapeake Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENN Energy and Chesapeake Utilities
The main advantage of trading using opposite ENN Energy and Chesapeake Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENN 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.| ENN Energy vs. Beijing Gas Blue | ENN Energy vs. EverGen Infrastructure Corp | ENN Energy vs. OPAL Fuels | ENN Energy vs. APA Group |
| Chesapeake Utilities vs. Northwest Natural Gas | Chesapeake Utilities vs. NewJersey Resources | Chesapeake Utilities vs. Atmos Energy | Chesapeake Utilities vs. One Gas |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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