Correlation Between Chesapeake Granite and TotalEnergies

Can any of the company-specific risk be diversified away by investing in both Chesapeake Granite and TotalEnergies 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 TotalEnergies 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 TotalEnergies SE, you can compare the effects of market volatilities on Chesapeake Granite and TotalEnergies 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 TotalEnergies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chesapeake Granite and TotalEnergies.

Diversification Opportunities for Chesapeake Granite and TotalEnergies

0.0

Correlation Coefficient

Chesapeake Granite  TotalEnergies

Pay attention - limited upside

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

Pair Corralation between Chesapeake Granite and TotalEnergies

If you would invest  118.00  in Chesapeake Granite Wash on October 5, 2024 and sell it today you would earn a total of  0.00  from holding Chesapeake Granite Wash or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Chesapeake Granite Wash  vs.  TotalEnergies SE

Chesapeake Granite Wash

Risk-Adjusted Performance

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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.

TotalEnergies SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TotalEnergies SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Chesapeake Granite and TotalEnergies

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

The idea behind Chesapeake Granite Wash and TotalEnergies SE 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.