Correlation Between Chesapeake Utilities and Socit Gnrale

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

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

Diversification Opportunities for Chesapeake Utilities and Socit Gnrale

0.09

Correlation Coefficient

Chesapeake Utilities  Socit Gnrale

Significant diversification

The 3 months correlation between Chesapeake and Socit is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Utilities and Socit Gnrale Socit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Socit Gnrale Socit and Chesapeake Utilities 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 Chesapeake Utilities are associated (or correlated) with Socit Gnrale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Socit Gnrale Socit has no effect on the direction of Chesapeake Utilities i.e., Chesapeake Utilities and Socit Gnrale go up and down completely randomly.

Pair Corralation between Chesapeake Utilities and Socit Gnrale

Assuming the 90 days horizon Chesapeake Utilities is expected to under-perform the Socit Gnrale. But the stock apears to be less risky and, when comparing its historical volatility, Chesapeake Utilities is 1.27 times less risky than Socit Gnrale. The stock trades about -0.17 of its potential returns per unit of risk. The Socit Gnrale Socit is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  2,581  in Socit Gnrale Socit on October 26, 2024 and sell it today you would earn a total of  417.00  from holding Socit Gnrale Socit or generate 16.16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	97.5%
Values	Daily Returns

Chesapeake Utilities  vs.  Socit Gnrale Socit

Chesapeake Utilities

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Chesapeake Utilities are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Chesapeake Utilities is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Socit Gnrale Socit

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Socit Gnrale Socit are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Socit Gnrale unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chesapeake Utilities and Socit Gnrale

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

The idea behind Chesapeake Utilities and Socit Gnrale Socit 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.