Correlation Between Chesapeake Granite and CCL Products
Can any of the company-specific risk be diversified away by investing in both Chesapeake Granite and CCL Products 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 Granite and CCL Products into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chesapeake Granite Wash and CCL Products Limited, you can compare the effects of market volatilities on Chesapeake Granite and CCL Products 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 Granite with a short position of CCL Products. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Granite and CCL Products.
Diversification Opportunities for Chesapeake Granite and CCL Products
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Chesapeake and CCL is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Chesapeake Granite Wash and CCL Products Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CCL Products Limited and Chesapeake Granite 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 Granite Wash are associated (or correlated) with CCL Products. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CCL Products Limited has no effect on the direction of Chesapeake Granite i.e., Chesapeake Granite and CCL Products go up and down completely randomly.
Pair Corralation between Chesapeake Granite and CCL Products
Given the investment horizon of 90 days Chesapeake Granite is expected to generate 1.15 times less return on investment than CCL Products. But when comparing it to its historical volatility, Chesapeake Granite Wash is 1.35 times less risky than CCL Products. It trades about 0.05 of its potential returns per unit of risk. CCL Products Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 56,116 in CCL Products Limited on October 5, 2024 and sell it today you would earn a total of 16,944 from holding CCL Products Limited or generate 30.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 20.45% |
Values | Daily Returns |
Chesapeake Granite Wash vs. CCL Products Limited
Performance |
Timeline |
Chesapeake Granite Wash |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CCL Products Limited |
Chesapeake Granite and CCL Products Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Chesapeake Granite and CCL Products
The main advantage of trading using opposite Chesapeake Granite and CCL Products positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chesapeake Granite position performs unexpectedly, CCL Products 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 CCL Products will offset losses from the drop in CCL Products' long position.Chesapeake Granite vs. VOC Energy Trust | Chesapeake Granite vs. MV Oil Trust | Chesapeake Granite vs. Mesa Royalty Trust | Chesapeake Granite vs. Cross Timbers Royalty |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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