Correlation Between HighPeak Energy and CHKEW Old

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

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

Diversification Opportunities for HighPeak Energy and CHKEW Old

0.35

Correlation Coefficient

HighPeak Energy  CHKEW Old

Weak diversification

The 3 months correlation between HighPeak and CHKEW is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding HighPeak Energy and CHKEW Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHKEW Old and HighPeak Energy 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 HighPeak Energy are associated (or correlated) with CHKEW Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHKEW Old has no effect on the direction of HighPeak Energy i.e., HighPeak Energy and CHKEW Old go up and down completely randomly.

Pair Corralation between HighPeak Energy and CHKEW Old

Assuming the 90 days horizon HighPeak Energy is expected to generate 363.04 times less return on investment than CHKEW Old. But when comparing it to its historical volatility, HighPeak Energy is 17.2 times less risky than CHKEW Old. It trades about 0.01 of its potential returns per unit of risk. CHKEW Old is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7,974  in CHKEW Old on October 11, 2024 and sell it today you would lose (785.00) from holding CHKEW Old or give up 9.84% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	44.56%
Values	Daily Returns

HighPeak Energy  vs.  CHKEW Old

HighPeak Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HighPeak Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, HighPeak Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CHKEW Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CHKEW Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, CHKEW Old is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HighPeak Energy and CHKEW Old

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

The idea behind HighPeak Energy and CHKEW 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..