Correlation Between CHK Old and EOG Resources

Can any of the company-specific risk be diversified away by investing in both CHK Old and EOG Resources 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 CHK Old and EOG Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for CHK Old and EOG Resources

0.0

Correlation Coefficient

CHK Old  EOG Resources

Pay attention - limited upside

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

Pair Corralation between CHK Old and EOG Resources

If you would invest  8,146  in CHK Old on October 9, 2024 and sell it today you would earn a total of  0.00  from holding CHK Old or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	2.5%
Values	Daily Returns

CHK Old  vs.  EOG Resources

CHK Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHK Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical indicators, CHK Old is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

EOG Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EOG Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EOG Resources is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CHK Old and EOG Resources

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

The idea behind CHK Old and EOG Resources 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.