Correlation Between Alexandria Real and Chesapeake Granite

Can any of the company-specific risk be diversified away by investing in both Alexandria Real and Chesapeake Granite 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 Alexandria Real and Chesapeake Granite into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alexandria Real Estate and Chesapeake Granite Wash, you can compare the effects of market volatilities on Alexandria Real and Chesapeake Granite 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 Alexandria Real with a short position of Chesapeake Granite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alexandria Real and Chesapeake Granite.

Diversification Opportunities for Alexandria Real and Chesapeake Granite

0.0

Correlation Coefficient

Alexandria Real  Chesapeake Granite

Pay attention - limited upside

The 3 months correlation between Alexandria and Chesapeake is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Alexandria Real Estate and Chesapeake Granite Wash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chesapeake Granite Wash and Alexandria Real 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 Alexandria Real Estate are associated (or correlated) with Chesapeake Granite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chesapeake Granite Wash has no effect on the direction of Alexandria Real i.e., Alexandria Real and Chesapeake Granite go up and down completely randomly.

Pair Corralation between Alexandria Real and Chesapeake Granite

If you would invest (100.00) in Chesapeake Granite Wash on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Chesapeake Granite Wash or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Alexandria Real Estate  vs.  Chesapeake Granite Wash

Alexandria Real Estate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alexandria Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Alexandria Real is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Chesapeake Granite Wash

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chesapeake Granite Wash has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward-looking signals, Chesapeake Granite is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Alexandria Real and Chesapeake Granite

The main advantage of trading using opposite Alexandria Real and Chesapeake Granite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alexandria Real position performs unexpectedly, Chesapeake Granite 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 Granite will offset losses from the drop in Chesapeake Granite's long position.

The idea behind Alexandria Real Estate and Chesapeake Granite Wash pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.