Correlation Between EQT and CHK Old

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

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

Diversification Opportunities for EQT and CHK Old

0.0

Correlation Coefficient

EQT  CHK Old

Pay attention - limited upside

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

Pair Corralation between EQT and CHK Old

If you would invest  4,122  in EQT Corporation on October 9, 2024 and sell it today you would earn a total of  642.00  from holding EQT Corporation or generate 15.57% return on investment over 90 days.

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

EQT Corp.  vs.  CHK Old

EQT Corporation

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in EQT Corporation are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, EQT unveiled solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with EQT and CHK Old

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

The idea behind EQT Corporation and CHK Old 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.